Q&A: Tony Glass: “Millennials demand a different approach to executive remuneration”
Author: PM editorial | Date: 20 Apr 2016
Pay and reward practice could be about to undergo a significant shift, says the general manager of EMEA at Skillsoft
With the news that CEOs around the world now earn up to 100 or even 300 times more than the average employee, is it time we took the issue of executive pay more seriously? What is happening on the ground in the GCC and where will executive reward go in future? People Management asked Tony Glass, general manager and VP of corporate sales, EMEA, at global learning and talent management company, Skillsoft.
Is executive reward in the GCC very different to the ‘Western’ way of doing things?
Essentially, the concept of reward is the same in the Western world as it is in the Middle East; it’s all about keeping employees engaged and acquiring and retaining top talent. Similar to many Western countries, the rise of the millennial workforce is providing new challenges in the form of new demands from employees for progressive remuneration offerings, such as flexible working and development opportunities and it is certainly something that needs to be considered for the future.
What impact does externally sourced talent have on the way executives are rewarded in the GCC?
When employing foreign nationals, there are some additional considerations, such as housing allowance, flight allowance and education assistance. Organisations in the region have begun to take a more holistic approach to rewards than in previous years, having realised that the value of innovation and company culture is important to productivity. Today, the identification, attraction and retention of top talent takes top priority and the challenge only increases when the field of candidates is narrowed to focus on highly-specialised areas such as consulting, tax and accounting, or when hiring GCC nationals is a priority, as many nationals are accustomed to eye-catching public sector opportunities.
Are you seeing a shift in the way executives are being rewarded?
The exec packages offered to employees in the Middle East are changing significantly and are likely to continue to do so. We are now seeing a move towards performance-based remunerations, with local talent taking up more of the senior positions available in the next tier of their organisations. Many organisations are shifting their focus to a ‘total rewards’ approach to increase the perceived value of non-cash benefits, and to encourage employees to focus on a ‘whole pay’ approach rather than the individual elements of their compensation packages. However, market analysis suggests that 2016 is set to be a less buoyant year for salaries in the GCC compared to the previous 12 months. While employers’ sentiment for the year ahead is positive, there is less optimism than in 2015.
How can HR prepare for the changing practice of executive reward?
By researching their employees’ needs and wants, and establishing a robust employee value proposition, employers will be one step closer to retaining their valued employees without an overemphasis on compensation. If GCC organisations are serious about employee engagement and retention, flexible benefits need to be considered.