In our 5th Annual Reward event, over 80 senior HR and reward professionals were treated to a fact filled and insightful presentation by Simon Kennedy and Jairus Ashworth from the Aon Talent, Rewards and Performance team.
They talked about three key topics:
1. The continued slow, and historically low, wages growth in the Australian economy despite a relatively healthy macro-economic landscape. Despite predictions from the nation’s leading economists at the RBA of a rebound, for each of the last seven years, this has yet to manifest and wages growth remains very restrained. Despite this there are growing areas of market imbalance and wages pressure which companies have been responding to through higher rates for new hires (without necessarily adjusting existing employees) and through out of cycle wage increases to address internal equity and retention issues thrown up by low wages growth. Of particular note, out of cycle pay adjustments have increased markedly in 2018, up nearly 200%.
2. Technological disruption continues to impact all industries and the demand for technical talent which can drive this change is high across all companies, not just the tech industry. The Aon team highlighted the results of some groundbreaking research which identifies the talent and reward practices used at high performing “turbocharged growth companies” beyond big stock grants and every prerequisite you could possibly imagine. Amongst these were that these companies are far more likely to treat lateral moves within a company as a promotion as this drives innovation and cross pollination, and that they are far more successful at sourcing incoming talent through employee referrals, with the top tech companies able to source over 50% of their talent through this channel.
3. As companies continue to improve diversity and equality of opportunity for their workforce we have moved to a stage where like-for-like pay gaps are getting very small. However huge issues remain around participation in more senior and lucrative positions. They highlighted several very interesting insights; that companies who set targets for gender participation improvement at more senior levels achieve 3 times the rate of change than those who don’t, and that bonus outcomes for part time employees (who are predominantly female) are consistently lower even when adjusted for working hours. Companies need to be very aware of whether the mechanisms for awarding incentives are discriminating against those who work less than full time hours.
The presentation ended with an amusing look into the weird and wonderful world of job titles. We are thankful as always to Jairus and Simon for their engaging and unique insights and we look forward to welcoming the Aon team back again next year.