Reward - now a strategic area of HR
The area of reward within HR has only been developed, and really understood, over the last couple of decades and the CIPD has only recently launched an official reward course.
In addition, employers have now started to view reward as a professional HR role rather than something aligned with finance or payroll, and companies now understand how it can benefit them. It's an important area of a business and HR departments, because salaries help to attract and retain the best talent but also need to be as efficient as possible in terms of spend.
How is reward categorised?
Reward professionals are strategically aligned to a company’s pay strategy, internal operational goals and the external marketplace. Reward can be split into two areas: cash compensation and Benefits.
Reward professionals in the cash compensation area focus on reward in terms of base salary and bonuses. Reward professionals will be responsible for benchmarking, as offering a strong remuneration package, which is based on market conditions and competitors’ salaries, can help employer branding and competitive advantage.
The other area of reward focuses on Benefits in relation to retention strategies; professionals in this area will look at different ways of efficiently keeping staff engaged and motivated by offering quality Benefits.
Trends in the reward sector
Reward roles are largely limited to bigger businesses which have thousands of staff, making pay and reward decisions more complex. These larger companies tend to be based in the UK’s largest cities. Smaller companies may expect reward professionals to focus on both areas or HR generalists may take overall responsibility.
In recent years, the reward job market has been quite niche, characterised by a lack of talent, especially at the £40-70,000 level, due to the unique skill set required. Professionals need to have a background in HR as they need to understand people strategies but also need to have analytical and financial skills in order to work with large amounts of data. Therefore, the job market was traditionally candidate-driven and professionals could command high salaries.
However, the recession has changed the market and well paid contracts are now harder to secure because commercial businesses have already dealt with their salary changes. Generally, employers are telling us that reward ideas and principles that were prevalent in 2008 still apply today meaning that few change projects are happening in the area. In the public sector, reward professionals are fairly uncommon but this may change as budget cuts impact on salaries, Benefits and pensions further.
What can reward professionals expect to earn?
Due to the highly skilled nature of the market, there are not many junior reward professionals. Employees tend to come into reward roles via a HR, payroll, finance or accounting routes. In London, it's rare to find a reward position offering less than £35,000. At this level, the role will be more analytical, focusing on compensation or Benefits analyst.
More senior analysts will be responsible for job/salary evaluations and the benchmarking process; they can expect to earn about £50-55,000. Reward managers, who work closely with senior managers and HR directors to decide on salary, bonus and incentive decisions can expect to earn £50,000 plus. However, salaries will vary depending on the industry, size of company and the coverage of the role, for example whether it is UK wide or international.
Within the Benefits arena, a Benefits officer can expect to earn £35-40,000, a Benefits manager can expect to earn about £50-60,000 and an international Benefits manager can expect to earn £70-80,000. The cash compensation side of reward is slightly better paid and any role with international requirements will offer higher salaries as professionals will need experience of international employment law and cultural differences. International reward directors can expect to earn £70,000 upwards.
The current landscape in reward
Currently, opportunities exist for experienced analysts at the £40-60,000 level across central and greater London.
Roles are mainly permanent and have a cash compensation focus. There are also opportunities for reward professionals who have strong HR management information experience as well as reward experience.
For more information or to access the latest HR jobs please visit: www.hays.co.uk/hr