Senior managers and international employees in particular are affected by the far-reaching changes in the world of work and in compensation: in the form of global trends and local legislation. Anyone responsible for keeping an eye on the remuneration of executives worldwide is therefore faced with a whole series of challenges. hkp.com talked to hkp/// RemuNet Managing Director Jouco Bleeker and Barry Kitz, Global ExecuNet Network Manager.
Mr. Bleeker, hkp/// RemuNet manages Global ExecuNet, an international survey network covering over 55 countries – consolidating pay, policy, practice, performance and productivity related data of over 120,000 senior and executive staff. Since so many people nowadays are talking about the transformation of labor and work: is the benchmarking process also changing?
Jouco Bleeker: We do see transformational changes in industries and companies. A company might be classified as “Chemicals” by the Financial Times listings, but sees itself as a “Health & Nutrition” company. This brings specific requests regarding peer companies for comparison when benchmarking executive reward levels globally.
So is benchmarking becoming – like so much else – more individual?
Jouco Bleeker: Exactly. In addition, especially in developed countries we see an added interest in comparing overall employment terms, rather than reward levels only.
Barry Kitz: We help companies assess not only actual and monetary value, but also the perceived values of wider employment terms. This could translate into working time conditions and flexibility for regular office professionals, and extends to better travel arrangements for executives or expatriate premiums if local conditions deteriorate.
Local framework conditions also include the respective legal situation...
Barry Kitz: Indeed. Our data shows how the heavy influence of country legislation surrounding rewards hinders a truly global, holistic approach to manage employee shares as part of the reward package for executives across all countries. A tremendous increase in currency fluctuations over the last years – especially among major currencies – due to trade tensions and Brexit, further exacerbates this if trying to achieve parity among executives globally.
What global trends do you observe in Executive Compensation?
Barry Kitz: We see continued increasing “spread” among regions and countries; while Anglo-Saxon countries and companies tend to accelerate increases towards the top further, we see more self-reflection in Europe, also due to the financial crisis of 2008-2009, and hence relative restraint. We see similar divergence in Asia. While Singapore and, more recently China seem to follow the US example in terms of reward levels for senior executives, Japan and Thailand, for example, apply more restraint again.
Jouco Bleeker: Another trend is towards more ‘at risk’ pay. Performance horizons become longer and measures more diversified. Some executives face longer-term horizons, whereas others must ensure quarterly cash-flow. This is getting better reflected in overall pay-mix and measurement of balanced score cards for executives.
The Global ExecuNet Survey captures and analyzes cross-regional compensation practices and systems. To what extent do Executives get paid differently from culture to culture?
Barry Kitz: The diversity of systems and compensation practices is enormous. In India for example, housing is a significant value in the overall compensation package for senior executives, which is normally only accounted for in expatriate employment. We also observe interesting differences when analyzing merit increases globally. In China for example, there is very little differentiation, whereas in the US higher variance in performance scores and merit increases are often observed.
Jouco Bleeker: If the survey participants are interested and sufficient data can be collected, we include country specifics in our surveys. Through this pragmatic approach, our survey has systematically grown in recent years into a unique resource for the worldwide comparison of compensation practices.
2019 the 9th Annual Chapter Meetings of Global ExecuNet are taking place. What exactly is Global ExecuNet and what will be important topics on your agenda?
Jouco Bleeker: In Global ExecuNet, large global employers in Technical Manufacturing and related industries meet not only for comparative and statistical reward and people analytics, but also for regular face-to-face meetings and workshops in order to remain updated on the latest trends of reward topics and issues related to senior and executive staff globally.
Barry Kitz: A trending topic this year is the link between performance and pay and specifically whether the time spent in measuring performance individually is worth it, both from an employer and employee perspective. Another current topic is related to transparency within the company for policies and data on HR, reward and performance. These topics are on the fall agenda. Other items we’ll discuss are related to the cost versus perceived value of benefits such as pension and flexible benefit arrangements or day pleasures of internationally mobile staff.
Besides the upcoming events in Dubai, Singapore and Shanghai, this year you’ll also hold a large meeting in Paris. Do you recognize any particularities in how compensation develops or is discussed in Europe?
Jouco Bleeker: I think the issue of fair and equitable pay, whether from a gender perspective or more general, has a stronger focus in Europe. There’s also more attention to stress among staff, especially senior staff, who’ve had to mold themselves into individual 24/7 “on” machines in the Anglo-dominated years of late. The question is whether you can demand that much from staff and if performance can be consistently high under such circumstances.
Your trip to the meetings begins in October – what are you looking forward to most?
Barry Kitz: Meeting with the many company representatives in the various regions. We see each other once annually and speak on the phone or by e-mail during the remainder of the year. So it’ll be very good to catch up. We always have network dinners, so there’s enough time to also catch up with friends and contacts personally.
Jouco Bleeker: Passing all regions annually allows me and our dedicated Global ExecuNet staff to also keep up to date on trending regional topics and questions or of local members’ perspective. Global ExecuNet is not only for, but also by its members. That’s reflected in our agendas, our hosting and the reciprocity of our information sharing.
Thank you very much!