What Are You Worth?

Zoë Blake on remuneration reviews from the individual’s perspective.

A gap in the market

Search on the internet for remuneration consultants and you’ll find dozens of practices offering their services to companies anxious to benchmark their remuneration packages against the rest of the market. But what if you – candidate, employee or potential employee – want to be benchmarked? What if you want to assess your own financial value to a business or in a new sector? According to Executive Action’s Anne Isaacs, there was a potential gap in the market: “Senior people working with us have often had numerous psychometric tests and have already learnt everything that could ever be useful about their own abilities and management style.

“What they really wanted to know, and had no way of finding out (except perhaps anecdotally) was what it was reasonable to expect financially if they were to stay put, move to a comparable organisation or head off into new territory. Though this information might not wholly drive a decision to stay, to go or to do something radical, it’s certainly a very useful perspective to have.”

The right people for the job

Enter vastly experienced HR consultants Vyv Attwood and Lesley Pearson. Vyv (previously head of HR, communications, logistics and business improvement for Zurich Financial Services in the UK) and Lesley (a remuneration consultant for eleven years and ex-Allied Dunbar, Gillette and Gestetner) have been working together on a range of HR and business management assignments across various sectors.

Both had also been involved in designing the kind of complex remuneration packages and long term incentive arrangements that make it so difficult to compare ‘like for like’.

As Vyv puts it: “Despite being an excellent, and rather obvious, idea, no-one else seemed to be working for individuals rather than for companies. Headhunters clearly work for, and are paid by, their corporate clients, while outplacement consultancies, who are basically on the client’s team, are often loath to originate or increase their costs.

“We concluded that any personal remuneration review worth its salt would have to be totally tailored to the client, meaning in-depth research, market knowledge and insight. All of which are time-consuming and rely on good contacts, up-to-date information and experience in interpreting the data.

“But, in discussing the possibilities with Executive Action, we agreed that it might prove really valuable for senior people seriously considering their options, as a part of their career management or outplacement programme.

Guinea pigs

“Setting out to test the water, so far we have worked with four Executive Action ‘guinea pigs’: a Strategic Development Director in the engineering sector, an HR Director in an international pharmacy group, a Director of Risk Management within a financial services organisation and an HR Director in commercial/retail banking. All are currently employed, although one has recently started a new job and another is looking seriously at options.

“Feedback so far is good. One ‘guinea pig’ wished fervently that he’d had the review before accepting a recent new appointment, and another suggested that it would have made clearer the diverse options available if she’d been able to make a genuine comparison between one complicated package and another.

“In our third review, we identified an important aspect that our ‘guinea pig’ hadn’t been aware was unusual for this type of role. His salary was reasonably good for the sector, the bonus above market norm and other benefits on the generous side, but missing altogether was a long-term incentive/share scheme. Our total figure for the package was about 20% below remuneration for most equivalent positions.

“Our analysis took into account such factors as how long he’d been with the company and everything else particular to this job and to its benefits. We also compared reward levels in his sector (retail) with that of others, and looked into prospects for attaining a Board position if he stays in a company in the same field.”

A mid career ‘check up’

In addition to being available when a serious job offer has been received or when a particular type of role is being pursued, the service is also being offered to Executive Action’s clients and ex-clients at any point in their career as a kind of ‘check up’. As Lesley Pearson suggests: “We envisage that people will be most interested when they are assessing their options or when a salary review is pending. We’ll advise on whether a current package is still competitive.”

Pursuing your dreams: the real cost

According to Anne: “People can be blinded by enthusiasm, or conversely by fear, when considering a radical move. We often see clients desperate to change their working environment or their work/home balance, often in order to gain more autonomy. In moving into a new sector or a much smaller company, the great unknown factor – the financial cost of such a step – can be very unnerving. “We’d consider this part of building your knowledge and getting to grips with a new environment. Having a sound idea of what you’re worth, both now and potentially, is a terrific thing to have in your armoury when you’re making big decisions about your future.”

Posted: January 13th, 2010 | Author: Executive Team | Filed under: Miscellaneous | Tags: benchmarking, career management, Outplacement, remuneration | No Comments »