Emerging reward trends

With the fast-paced recovery of a lot of businesses following the recession, 2011 is proving to be an extremely eventful year. The combined effect of renewed consumer confidence and a flurry of M&A activity means competition for talent is fiercer than ever. As companies increasingly invest in emerging markets, so too emerges the need to attract and retain talent in traditionally unfamiliar geographies, whilst remaining competitive locally.

Several additional factors play a role in driving the demand for strong reward professionals today. New regulations especially in the financial services industry means companies face a barrage of compliance issues around remuneration, with executive compensation under the spotlight. We find ourselves in a cost-conscious post-recession culture, with a change in the traditional 'send in an expat' approach to a source locally tactic.

US and UK organisations are shifting their focus to less saturated markets and looking for higher margins in Central and Eastern Europe, Asia-Pac and Latin America but emerging markets bring with them new reward challenges.

How do we develop a strategy and structure that is reasonable, lawful and meets the needs of the business when taking into account local culture and political and economic stability?

Streamlining global base pay and sales incentives is feasible but equity compensation is complicated due to local legislation and cultural differences. In companies with a decentralised model, empowered and differentiated local entities make co-ordination and consistency difficult. Andrew Stemp, the European Reward Director of Amazon says "the biggest challenge in emerging markets is setting pay and benefits at meaningful levels to attract high calibre talent but without access to the traditional robust survey data we are used to in more established markets. We also have some specialised roles unique to our business where there is no market benchmark so we are very much having to take the lead. The speed of our growth means we need to be both pragmatic and decisive in our approach to compensation so we can continue to focus on delivering to our customers.

To combat these and other challenges companies are shifting to a Glocal (Global / Local) strategy, a strategy where global guidelines are considered but heavily tailored to local legislation, culture and business needs, a novel idea but not one easily implemented without the combination of a global mindset and local knowledge.

Reward professionals with international experience have become a rare and highly sort after asset, particularly in London, with those seeking a new challenge in the market receiving multiple offers of employment from different businesses. With companies being forced to sit up and consider new markets and the need to source talent globally due to local shortages the international reward professional is the new breed in demand!

Brad Law, Consultant, Frazer Jones, London Office
E: bradlaw@frazerjones.com
T: +44 (0)20 7415 2815

"The combined effect of renewed consumer confidence and a flurry of M&A activity means competition for talent is fiercer than ever."

 

 

 

"The biggest challenge in emerging markets is setting pay and benefits at meaningful levels to attract high calibre talent." Andrew Stemp, European Reward Director, Amazon.

 

 

 

"Reward professionals with international experience have become a rare and highly sort after asset."