The events of the last two years have drawn the data industry’s attention towards reward in a way that arguably few other sectors have experienced in recent times.
From a start point, even prior to the pandemic, where acute shortages of talent seemed to cause challenges to all but the highest profile, cash rich and attractive of employers we have subsequently seen the additional impacts of remote working, increased focus on work/life balance, widespread recognition of the importance of employee health and well-being and the kind of wage inflation not seen since the early days of the .com revolution.
Organisations have been forced to take immediate stock of their reward packages and to adapt, evolve and restructure them under the most challenging of conditions. As competition increases, the need to both entice and secure the best available data talent can be crucial to not only the success of data projects but, often, to the business itself.
It is into this landscape that we now enter, looking to understand a little more about what factors can and will impact the make-up of reward packages of tomorrow.
In this short piece, we will focus our attention on three key arguments presented by Scott Leishman, Global Head of People & Talent at vector.ai.
Scott is a veteran tech and data reward specialist, with a wealth of industry experience. A recent guest on our Changing Shape of Reward Podcast, Scott highlighted some key observations as he reflected on the changing shape of reward within the industry
Total Reward
Scott argues that reward must be so much more than a fiscal measure – a holistic approach is increasingly required to ensure both initial talent attraction and long-term employee engagement. As talent, particularly within niche areas such as data, becomes more in demand, these demands are reflected in conditions beyond the salary that they are paid to do the job. Areas such as work/life balance, purpose, individually tailored benefits, and organisational societal/environmental consciousness become key pieces in the chess game that is talent magnetism.
This holistic concept, which they call “Total Reward” is expanded upon in an excellent 2021 whitepaper by AON. In the piece, AON argue that any “future-proof” reward package will require the following elements:
This “wider lensed” approach can perhaps also help to lessen the speed at which basic salaries have risen over the last few years. Scott mentions the wage inflation that has resulted in large-scale redundancies at organisations recently – a consequence of perhaps focussing too much on one singular financial element of the reward package - instead of broadening the view out towards AON’s holistic proposition.
Increasingly, we at MBN Solutions see organisations being forced into an auction, often unfairly, as multiple potential employers bid their highest for the skills of freshly available niche data talent. A more widespread adoption of Scott, and AON’s, philosophy would see a fairer and more equitable reward landscape emerge where, although still very well paid, data talent would be choosing from a much wider and more balanced set of factors beyond simply basic salary. This, in turn, could help to mitigate the cycles of “boom-and-bust” that we see so regularly as organisations shed staff as quickly as they have hired them not so long ago.
David v Goliath
Nowhere is the disparity between what fiscal reward can be offered by different organisations starker than when comparing the reward offered by a typical SME to the type of packages available via huge corporates such as financial services institutions, global consultancies, etc.
Surely, in this uneven battle, the giant will always come out on top.
Surprisingly, not necessarily so. Necessity is, after all, the mother of invention.
Many smaller organisations are able to seduce talent from under the noses of their larger competitors by, in the first instance, pivoting in an agile manner when it comes to attracting and selecting talent (the all-important “speed to hire”, personal touch and ability to curate and nuance roles to suit individuals) and, secondly, by utilising and incorporating elements into their reward packages that are often difficult for larger corporate organisations to replicate.
Skin in the game
Scott advocates incorporating share options into reward packages for key individuals. He believes that by ensuring that employees have “skin in the game” with regards to the future success of the organisation, a step towards that previously described “Total Reward” package can be made. In this scenario, a potential promise of a future financial event can be used as a balance to the inability to pay as sizable a basic salary as could possibly be expected from a larger, corporate entity.
Impact
Ensuring that individuals are clearly recognised for the impact of their outputs, and that impact is demonstrable and visible throughout the organisation is another crucial factor that can help smaller organisations craft a competitive reward package. Often, when speaking to individuals transitioning from corporate environments, a frustration at having a “lack of impact” in their professional lives and just being seen as “a tiny cog in a huge machine” is cited as a key driver in seeking a new, more impactful, role. Aligning impact with increased reward milestones can create an extremely motivating environment for attracting data talent.
Flexibility
A final simple and pragmatic element that can be deployed immediately within a reward package to help offset the larger financial packages offered by larger organisations is flexibility – particularly around individuals’ work/life balance, care commitments and life journey. A flexibility that ties reward elements (such as benefits) to working pattern (such as full, part or flexi time patterns) and is modified over time to reflect life journey changes such as childcare or health contingency can be a powerful tool in crafting a compelling individual reward package in such a way that would be hard to replicate by a more uniform, less agile offering. A tailored, bespoke approach can often be more attractive than the “one size fits all” approach favoured by some organisations
Starting off on the right foot
For those within organisations that are starting to map out their employees’ reward journeys, there are some simple and pragmatic steps that, if followed, should ensure the best possible start to the process.
Initially, feedback should be taken from as many employees as possible to determine the most requested or popular reward package elements. Giving people what they ask for wherever possible is a sensible initial approach. Crucially, what should then be adopted is a widespread, regular, periodic review of these elements – a constantly in-play feedback loop – to ensure that, as much as possible, any changes can be made quickly to ensure a package that remains in line with collective expectations and not out of touch with what employees are potentially being offered elsewhere.
Secondly, the organisation should look to adopt internal communication systems that continually look to recognise employee’s individual contributions publicly, regularly, and comprehensively. Praise and recognition should be the norm, and wherever possible this constant positive message should be reinforced with reward elements – no matter how small or seemingly insignificant. Continual recognition, and subsequent reward, should be inbuilt as the default status throughout any employee’s tenure.
Finally, Company Values should be reflected in reward package elements as much as is practical – and these elements should also encapsulate the Purpose of the organisation as far as it is possible to do so. Building a holistic package that truly reflects the Values and Purpose enshrined within the organisation should be a foundation of any successful, tailored reward programme.
Tomorrow’s reward packages will be characterised by their holistic, flexible, and adaptive nature. Recognition of the individual will be crucial, as will be the ability to tailor singular elements that reflect the changing demands of an employee’s life journey. A focus on purpose, values and impact should help to ensure that environmental and social concerns can be reflected properly within the packages that individuals are provided as compensation for their efforts.
Hopefully, future reward strategies that embrace “Total Reward” can help to mitigate the boom-and-bust cycle that has characterised periods of acute talent shortage within the data space in the past and this wider lens can also, hopefully, provide smaller or newer organisations with the flexibility and agility that they need to ensure realistic and viable employment for emerging data talent.