Debrief on the 16th IIRME Compensation & Benefits Forum – Day One

So… Two weeks ago I was at the 16th Annual Compensation & Benefits Forum organised by IIRME in Dubai.

First of all, kudos to Ramy Bayyour for organising a great event with quality speakers and an engaged audience.

For this session, there was a nice mix of practitioners and consultants speaking. The event was chaired by Robert Mosley from LemonPip who did an impeccable job as usual. There were participants from all GCC countries, which provided an interesting background for networking and exchanging about the similarities and differences of C&B practices in the region. Every time I come, the conference gets better so I really look forward to next year !

Robert Mosley started by sharing global and regional trends in Compensation & Benefits.

His message was one of empowerment and growth for the function, where we should learn to focus on the total cost of employment not just total cash. So it is time for HR and C&B to stop asking Finance for the cost of healthcare at our companies, and start owning the data for all elements of the reward package.

Robert emphasized how much progress has been made in the region with the introduction of sound job descriptions, job evaluations and grading systems as well as KPIs. Performance management practices are becoming more prevalent, and pay-for-performance is becoming more widespread despite some cultural challenges.

He noted a tendency to grow towards 4 and 6-point rating scales in performance management to try and fight the tendency to rate at the central value. He also remarked how, in 1997, 75% of companies in the region were giving fixed increases only (same for everyone) while in 2012, 75% of companies pay merit increase only. Bonus payments tend to be less differentiated based on individual performance than merit increases.

On talent management, Robert noted that the concept of the 9-box grid can also be used by C&B,looking at the traditional performance and potential, but also retention and flight risks (checking likelihood as well as impact or pain for the organisation). We could also look into performance and retention rates in a 9-box grid.

Finally, he highlighted that only 10 countries in the world don’t allow work from home one day per week by at least 10% of companies. Of these 10 countries that are super reluctant to the concept of telecommuting and work life balance, 6 are in the GCC…. The other 4 are Thailand, China, Vietnam and Indonesia. The fact that the GCC does not embrace work from home denotes some serious trust issues between employers and employees in the regional culture.

The second speaker was John Branch from Hay, on the psychological contract of Reward.

What interested me most in his presentation was when he spoke about the Most Admired Companies. He said these companies focus on excellent execution, not sophisticated design.

For example, 64% of them focus on Total Reward, and engage line managers in the rollout of reward programs. In the GCC, both numbers are well below 50%. We are still lagging behind when it comes to these kinds of best practices.

Yet, companies in the region are obsessed with benchmarking. But they build a generic offer instead of one that is geared specifically to their organisational goals and employee needs, and therefore lose the opportunity to make the most out of that benchmarking. I found interesting to hear that point mentioned as wrote about that topic in one of my earliest posts.

In lin with what Robert Mosley had described earlier around the lack of trust between employees and employers in the region, he said companies were struggling to disprove the cynicism that currently exists around the ability of the company to apply its rewards principles in fairness.

In clear, employees fear that if they are on a 3-year plan, the company will fire them at 2 years and  9 months in order to avoid the deferred payment – and companies need to work on that.

How ?

He suggested better and more frequent communication, acting with integrity, being more transparent and proving trustworthiness. Educating top management to convince them to move away from discretion and communicate more around the criteria for payment as well as updates on how good the company is doing (to increase line of sight) would also help.

Tim Knight, who is finishing an assignment with Etihad Rail and would love to stay in the region (hint, hint !), then took us through an analysis of how Etihad Rail is linking Total rewards and Talent Management.

I especially liked how he described the challenges of being a start-up. You have to pay high salaries in order to attract qualified, experienced people right from the beginning. They are needed or your project will never take off. In the region, there is little opportunity to use stock/equity.

And, specifically, in his case, the rail industry is one where profit or ROI is difficult to prove (although the train line will pay for itself in one year through the transportation of sulphur as I understand). Yet the lack  or small size of profits means probable reluctance from the Board to pay bonuses.

The end result is a big focus on upfront, guaranteed cash, which is not sustainable in the long term, and creates equity issues once the company moves to a more mature phase where you would want to pay employees more in line with the industry.

Tim also said that talent goes where it is wanted, and stays where it is well treated. Words of wisdom….

James Veysey from Olive Group then covered the topic of doing more with less.

His view was that, in order to prepare for growth and slowdown, companies have to focus on the  having a permanent headcount as small as possible, and a majority of people through contracting. He mentioned a ratio of 10 contractors to 1 permanent.

For him, the idea is not necessarily to reduce cost through the outsourcing (benefits and pay may be similar to the in-house, corporate employees) but to focus on flexibility and the ability to quickly expand or reduce the non-core workforce. “Underpaying comes back to bite you”, he said.

His advice :

  • create a baseline (fair wage for the role, fair both for the company and the employee)
  • and then move to aspirational earnings, the ones that allow to pay off the mortgage or ensure the children’s education. For the employees, it means : thinking career in a reasonable timeframe, variable pay, shares/options, adapting benefits to employee needs and monetising them ie telling their value to employees.

Mike Lonergan from Friends Provident International then took us on an impeccable demonstration about golden handcuffs or long-term retention plans.

Mike started by making us realise that productivity comes mostly from tenured employees, not the new hires. Then he made us think about the current average tenure of our workforce and compare it to the ideal/target duration we’d like to see our employees stay.

He then made a very powerful analogy, comparing employees to a date farm. In a date farm, the tree grows for 4 years without bearing fruits, and thereafter it produces for 9 years. The ROI increases each year that the farmer keeps the tree. Companies should try to do the same and keep employees in their most productive years.

Options available and relevant to the GCC in order to try and increase tenure are, among others :

  • profit-related pay
  • share save schemes
  • pension schemes
  • corporate savings plans.

When they are well designed, they create a sense of loss if the employee were to leave and therefore make the employee look internally before deciding whether to move on, and it increases retention.

In the afternoon, Julia Miller from Jumeirah Group presented a case study detailing how her company designed and implemented a retirement plan for management.

Their plan has 1,300+ members, mostly in the UAE. What was interesting was the thought process that Jumeirah followed to design the scheme, asking a certain number of questions to the targeted employees and using the answers to inform the plan.

Some of the questions were :

  • When do you want to retire ?
  • Are you saving for your future ?
  • Where in the world will you be at retirement ?
  • How will you make your dream retirement happen ?

Julia shared some of the main attributes of the scheme, and also openly discussed some of the issues they faced.

It was a really educative session and everyone appreciated the example that Julia and Jumeirah shared with the HR and C&B community – the questions flowed to her and she answered every one of them without trying to hide anything. Thanks Julia !

There were 2 interactive sessions during the afternoon as well, including roundtables organised by industry and a panel where Wael Albassam from Zamil Industries in KSA, Talat Naseer from Drake & Scull and I shared some experiences and some of the schemes we implemented in our various companies past and present.

The first day was closed by Jacclyn Nautiyal from Aggreko, who covered compensation metrics.

Jacclyn shared with us a methodology to follow when auditing our compensation strategy :

  • set an internal target
  • and have an external target.

Most importantly, she reminded us that we need to think : what will we do with the data once we have collected it ?

So, you create the list of your existing plans. You also include the description of what their purpose was. You perform an employee survey to gauge the perception of employees related to these plans.And then, you take action : either you redesign the scheme, or you improve your communication around it in order to make it better perceived by its target audience.

Finally, she urged us to “dare to be different” and not copy/paste what others are already doing.

There really was a common thread between the speakers, with a focus on engagement/retention and a longer-term view of compensation, as well as the theme of being creative and not just blindly copying the schemes that others are implementing. The day balanced education, sharing experiences and networking and we all looked forward to the following day.

And that concludes Day One. I will cover Day Two in my next post.

 

Related posts :

Print Friendly, PDF & Email
Share the Knowledge !
Get Free Updates

Comments

  1. Hi Sandrine. Thank you very much for your kind words. Producing and running the forum was a great pleasure and a wonderful experience.

    I would also like to thank you for this amazing debrief. I will ensure that all participants know about it.

    Lastly, thank you for giving back to the industry and for your passion about HR and C&B.

    Ramy

Trackbacks

  1. […] Benefits Forum – Day Two July 3, 2012 By Sandrine Leave a Comment In my last post I covered Day One of the 16th Annual Compensation & Benefits Forum organised by IIRME in Dubai. It’s time to cover the second day of the conference, which was […]

  2. […] and the design of your incentive scheme July 15, 2012 By Sandrine Leave a Comment As part of the 16th annual Compensation & Benefits Forum organised by IIRME last month, I delivered a one-day workshop on how do design a recognition and […]

  3. […] Which metrics indicate a decrease in employee engagement ? September 6, 2012 By Sandrine Leave a Comment I have written about employee engagement in the past, and how pay is only one component of what motivates employees and drives them to greater discretionary effort… and therefore greater results for the organisation. It is actually easier to identify signs of decrease in employee engagement than to track positive KPIs of engagement (unless you’re starting from a very low point, in which case a positive trend is relatively simple to spot). Here is a quick checklist of signs of lower engagement, expanded from a slide that was part of the “Design a recognition and retention scheme” one-day workshop I delivered at the IIRME Compensation Forum in June. […]

  4. […] then, I have never stopped, and now do public speaking multiple times a year in local and international conferences or as a paid speaker for internal meetings at […]

  5. […] Debrief on the 16th IIRME Compensation & Benefits Forum – Day One […]

Speak Your Mind

*