Compensation and benefits

Jeremy Caird

VP – Rewards and Remuneration, DHL Express

Compensation and Benefits (C&B) seems to be a key area of HR that’s been radically changed during the recession. Most C&B professionals are having to work hard to balance reduced budgets with the need to keep employees motivated and engaged – especially the better performers. For some C&B teams, they have to spend more time on modeling pay data and company budgets in order to figure out how to spend less on people.

For many C&B and HR professionals, this is the first major downturn they have worked in. This means individuals have had to acquire new skills, such as communicating bad news to employees. Like many functions, some C&B teams have to work harder with fewer resources, given the ubiquitous reductions occurring amongst back office employees. However, despite the changes brought about by the downturn, C&B is still an exciting place to work: the business always takes C&B seriously, even more so when there’s the need to manage the bottom line so carefully.

Joydeep Bose

President and global head for HR, Olam International

We are definitely seeing sanity coming back into the markets for compensation at senior levels. Previously, there was a need to grab and pay for talent who could have a similarly fast impact on revenues.

The compensation structure at Olam is conservative. The supply chain managers for agricultural products and food ingredients have fixed salaries which we benchmark against the industry – that is the short-term compensation structure. For the long-term, we look at giving employees equity in Olam. 15% of the company is now owned by staff.

Another important consideration is the tasks staff are asked to do. In my opinion, an overpaid employee is not always a happy one. It’s important that staff realise the value in their jobs is not completely defined by the salaries they bring home. So we aim to create a competitive value proposition for all staff. We offer a global career that is driven by entrepreneurial roles where the scope and role is without boundaries. With this we have managed to keep turnover at Olam below 10% without placing pressure on compensation costs.

Simon Alford

Compensation and Benefits Director, STMicroelectronics Asia Pacific

Different industries have taken the downturn also as an opportunity to refine or to remodel their compensation models or their benefits programmes. This is a good time for HR to drill down into expense-related issues and carry out a complete review of how the company’s money is being spent. Mergers and acquisitions are typically reduced during this time as well as expatriation, giving HR more time for a better overall review assessment.

Compensation typically gets frozen in a downturn, in alignment with reducing overall costs to the company on cost savings. This is in addition to reductions on all expenses, travelling and training and it is the easiest way for a company to save immediate costs.

However, when the market heats up again and the ‘high potentials’ have not been taken care of, they may slip behind the market benchmarking rates and are therefore easy pickings for those voracious head hunters. Take care of your top talent in order to shore up your platform of talented professionals, which are the pillars of any organisation.