9th JULY 2020

[Corinne Carr: CC] [Matt Brooks: MB]

CC: Hi, everyone! Today, I’m delighted to introduce Matt Brooks to you. Matt is an independent Reward recruiter that I’ve known for a very long time. And he kindly placed me as the Interim Head of Reward at Direct Line, if I remember rightly, a few years ago. So Matt, I’d like to ask you to introduce yourself, please tell us what you do, and then maybe you can explain to our listeners, what is Reward?

MB: Oh, nice to be chatting to you. And thank you for this opportunity. I am, as you say, an independent Reward recruiter. I have been looking after the senior end of the Reward market as a recruitment consultant across all industry sectors within the UK throughout Europe for about 16 years now.

I started off life as an expert tax specialist at PwC. And then fell into recruitment after about seven years of doing that. So I’ve been in and around the function for pretty much 20 odd years working as a consultant.

My focus these days is at the more senior end of the market, but in my early days, I was working on very junior roles as well. No industry focus, no particular geography that I’ve had less or more experience in. So I’ve seen it from all angles and across all geographies.

For me Reward includes a bundle of sub sectors, but fundamentally it is the HR function that is focused on the attraction, retention, and motivation of talent within an organisation. If you break it down into its constituent parts, you can go on forever. But if we look at the cash side, the benefits side, the pension side, the discipline around global mobility, payroll, and share schemes and you could go on forever. But the way I see it, that HR spectrum is probably the most reactive of the levers that an HR function or a business has in order to pull and change the behaviour of his employees. And therefore, from my perspective, it has a direct and immediate commercial impact on the business. So that’s my overview of how reward is and operates.

CC: I tend to define it as “how in how much you pay people”. That’s my quick strapline, on defining what a reward professional does but obviously it’s much more complicated behind the scenes. We’re going through some very uncertain and troubled times at the moment. Can you give us a quick overview of what’s going on? What do you see in the marketplace?

MB: I will try and give you a quick overview. The reality is, as you say, this is troubled times and therefore the market doesn’t really have one particular personality at the moment. It’s chaotic, it’s unpredictable. And it’s very difficult to pin down. So as I mentioned in that quick intro, I cover all industries. And there are some industries that have been absolutely destroyed by the virus. I mean, obviously, those in the hospitality and travel and leisure areas have a very tough time of it. But there are others that are thriving. And so when you look at the reward recruitment market, you’re seeing all sorts of behaviours and Rewards as a skillset in general is fairly resilient. And whether you were in a significant downturn and economic challenges, whether we’re thriving, businesses still need talent in this space either to spend all of the very good money and lots of money that they have wisely, or to do a load more with less.

What I’m seeing at the moment is that you’ve got some organisations that are shutting their doors to new talent or others that are expanding. And with some organisations that have struggled, of course, we’re putting more talent into the market. So it’s certainly strong from a supply side. If you’re in the market to bring on more Reward talent, you’re going to have a real buyers’ market, you’re in a strong position. At the senior end, where I spend most of my time, there is interest from those clients that are looking for both permanent and interim professionals, probably in equal measure, usually throughout the year. The ratio of permanent roles on the market versus the non- permanent roles, if you like, shifts. At the moment, it’s pretty much 50/50.

I would say that virtually every organisation that’s looking for talent will consider both the interim and permanent markets, which makes it quite difficult to understand what the long term plans are. And the other complexity we have in the market at the moment is we’re in in the summer months. And summer is traditionally a slow period of activity. It really does remain to be seen whether 2020 is going to follow the rules for that because we’ve had such a strange first six months. It’s not obvious that we’re going to follow that normal shift of things slowing down throughout July and August. With people not willing or not able to go away, it’s possible that perhaps we will rally strongly throughout the summer. So, you know, fundamentally, this is a question I get asked by my candidates and my clients every day and I’m struggling to find a clear answer because I can see pretty much every behaviour that I’ve ever seen happening in the market at this very time.

CC: Yes, certainly 2020 is not panning out as we were all expecting it at the beginning of the year. That’s for sure! Let’s go back to what you were explaining in terms of the Reward function being part of the HR function. Our role is to design Reward strategies, and of course they don’t, they cannot operate in silos, in a vacuum without supporting the HR strategy and the business strategy. So what do you see on that front when you’re talking to candidates and indeed clients as well?

MB: Inherent in the business strategy is the Reward strategy. And these are not necessarily separate pieces when I’m speaking to my clients. Fundamentally, if you look at every job spec, you’re going to see a line in there that says, “we’re looking for somebody who can help design a reward strategy that supports the business strategy.” And if you look at it, pretty much every senior player’s CV, they’re going to allude to that in the way that they work. So it really is hand in hand. This is part of it, there’s an argument to suggest that really a Reward strategy shouldn’t even be a separate document from the HR strategy, from a business strategy. We’ve been saying as a workforce for years that “people are our greatest assets” and they are in pretty much every industry that I deal with. And therefore, you shouldn’t be looking really to separate one from the other.

When you find people or businesses where that link isn’t overt, it’s fairly obvious. But it doesn’t happen as often as it may have done in the past. And I think one thing that the Reward function benefits from is that it has a close relationship with the Finance function of a business. And as such, it’s apparent when you make that clear link between a strategy from a Reward perspective that links into the business side because you’re that person who is talking closely with the CFO offices, directly involved with a much broader area of business strategy.

So when you’re dealing with numbers and you’re speaking to the numbers guy, the two people are speaking the same language, which I think is more difficult for other areas of HR. I’m certainly not suggesting that they don’t manage it, but it’s perhaps an easier route for the Reward director to make that link.  We’ve seen the evolution of Reward that we’re not just paying rations. Areas of Reward are now very much inherent in those strategies of benefits, of well-being and engagement, things that are fundamentally less easy to quantify than cash compensation and incentives. Showing an overt link between one and the other is slightly more challenging and comes down to strong communication and a good understanding of the workforce and those that are affected by it.

CC: It’s interesting that you’re saying that the profession has evolved over the years. In my 30 years in Reward, that’s certainly something I’ve seen from recruiting Tax specialists like yourself to looking at a very wide range of activities like benefits, well-being and engagement that are becoming an intricate part of the Reward offering. Can you just give us your take as to how the profession has evolved over the years? You’ve been in the game a long time as well so it’s interesting to understand what’s been happening, and what are the current trends?

MB: It’s a constantly evolving position. It’s a constantly evolving set of terminology. When I first got involved in the late 90s, we talked about Compensation all the time, and that was almost the only word that was used. And that started to shift into the use of the term Reward, which was, you know, coming away from this sort of negative connotation of Compensation, that I’m compensating you for this horrendous thing that I asked you to do every day versus Rewarding you for the wonderful work you do.

And that was how it was positioned as that was coming in. And then we saw Reward evolve a little further into Total Reward. And everyone was talking about Reward statements and making sure that people understood that actually the reward they received for their work wasn’t just monetary. And that that was the period where we started to see the Reward professional come into their own. They stepped from behind their spreadsheets and came into a business partnering role.

And then, I think the next sort of obvious trend I noticed was around flexible benefits. The consultancies jumped on to that and then all of the professionals in-house had to react and build their flexible benefits strategies. And at that point, I think I first heard the term ‘well-being’. To be honest, I think that was a little bit of a false start back then, but it was certainly the first time that I’ve heard that term which is now obviously fairly ubiquitous.

We also saw the impact of and will continue to have legislation coming into play. Most obviously and recently, things around Gender Pay Gap. There’s a huge focus on exec comp from the shareholder revolts that we’ve seen burying their teeth in the public, in the city, which is really starting to affect everything that we see in terms of executive reward strategies.

And probably the most fundamental evolutionary moment if you like in the recent past has been that of the financial crash about 10 years ago now. It seems to be that long ago, it was somewhat up to that point that we’ve noticed Reward teams were growing fairly sizable. People had quite siloed responsibilities within their teams, looking after very specialist areas and deep areas of specialism that came out of all of these various trends around benefits and different areas of cash.

And then when the crash happened. Of course, we had to rename every function and every business had to downsize to some degree. And we saw the re-emergence of that blended cash and benefits professional. Which was quite interesting, because over that preceding decade, you’d certainly seen that broken down.

And then obviously, on the back of the crash, particularly in the financial services industry, was the evolution of all of the regulatory environment that we now take for granted if we’re working in banking, finance, insurance groups and asset managers. And that’s been quite significant. Because not only, of course, is it now the fundamental basis on which all Reward strategies are built within those FS institutions, it’s affected the type of people who are in those roles, who are attracted to those roles, and it’s affected the sorts of individuals that those businesses look for.

And that’s been hugely impactful. It’s affected the way the industry is seen by the Reward profession as a whole.

CC: So, you know, that I specialise in an area called Responsible Reward, which is integration of sustainability factors into the Reward offering and into incentive plans in particular. Does it come up on your radar at all? Because it sounds to me that some of the requirements that you’re being asked for by your clients do link back to sustainability, whether they are the regulations you’re talking about, the wellness, the well-being factors. These are all sustainable factors to make the business sustainable long term. So does that ever come up in conversation with clients?

MB: In a direct, open and overt way? I think the answer is no. I don’t hear my clients using that term, specifically, to describe what they’re after. And I don’t see it on people’s CVS. I think organisations are looking for it. And you and have talked about this over the years and my understanding of it itself is evolving. But it is not something that is articulated clearly. Not, not to my knowledge at the moment. If you look for it, it’s there.

CC: So it’s not well articulated, but it is definitely a key part of what Reward professionals are being asked to do now, in addition to being good at numbers and analytics. When we look at innovative Reward practices, you’re talking about wellness and well-being. And there’s also a very close link to the values, the culture and the purpose of the firm. So these are all big themes that keep coming up. And in fact, they absolutely link back to Reward as well. So have you got any thoughts on that particular trend?

MB: The genuine link between Reward, culture and the recruitment process is a fairly recent thing. If you go back 10 years or more, businesses may have mentioned it to me, but it was lip service. I didn’t notice a difference in the individuals that were being hired or indeed the requests I was getting. I would often be pointed to the page on the websites, ‘go and have a look at our values’. And those values were always often a list of generally accepted values like honesty, integrity and hard work which were not particularly insightful, and were certainly not unique to each individual.

Whereas, now I think, having seen the somewhat incontestable links between employee engagement and commercial success, businesses have started to take their values more seriously because individuals are taking more seriously.

We see people leaving businesses because they don’t like the behaviours within the corporate world in which there are. Going back to my point about businesses accepting their people are their most valuable asset, then they have to be seen to be doing more than just having a page on their website that says ‘this is all our values’. Then they need to live it.

Well-being as one particular practice within Reward has come out of where it was really just telling people to get off the bus or stop earlier and walk into work, and join the gym into something which is now genuinely strategic and genuinely met. The progressive organisations have mental, financial, physical, medical health as an intrinsic part of their offering.

And now I’m starting to see that not only candidates in the Reward space are very proud of promoting the areas that they have influenced within the companies in which they’re working for but businesses are selecting based on that. So to your point, it’s more than just being good at writing some numbers down and making sure that they add up. But actually understanding what they really need to do to look after their people.

And it’s much more as I say, than just telling them to join a gym. I think people who work for organisations that have strong reputations in this area are really the people that are most sought after these days. And my clients will quite often point me towards target organisations because they are known for leading the way at the moment in that space. And all of those trends that we talk about like well-being, diversity and inclusion are basically the buzzwords for fairly obvious reasons that the Head of Reward is expected to be absolutely on top of and developing and using to attract and retain talent.

CC: If you’ve got a workforce that is engaged and in good health, both mentally, physically and financially, then that absolutely impacts productivity and how the firm is performing. So there’s a direct commercial link between the Reward activities, the Reward offering and the commercial success of the firm. So all of these activities that you’ve described like wellness, well-being come under the ‘S’ of ESG, under the Environmental, Social and Governance factors that are part of the sustainability angle. So there is a direct link. I think people are not putting it down maybe in those terms, but what they’re asking for in terms of the experience and the desire to do a job that reflects one’s values very much seems to align to those sustainability factors that we’ve talked about.

It can’t be easy to match the requirements on paper of what a client and a candidate want. So can you give us an example of what’s a good fit? How do you know you’ve got it right when you’re placing somebody in a role in a particular firm?

MB: Well, that’s the holy grail of recruitment. It should always be about getting that fit. But fit is a highly individual concept. And as a result of being individual, it offers enormous numbers of risks that are inherent in trying to get there. A business that has a very strong culture goes some way to mitigating the risk that comes out from something that is so individual. But it is very difficult. So, while as a recruiter and all of my colleagues in this industry will do their best to find that, there are some really major obstacles along the way. So, to articulate that, the thing that the individual says that they love about an organisation quite often directly relates to their individual relationships with colleagues, direct relationships with their bosses. And as such, if that is what they are recognising as a nice fit for them, it’s an incredibly fragile structure.

It’s not just always individual. And we’ll talk about what a strong culture can do to assist this. But we’re talking about something that is really difficult to articulate. It’s very misunderstood. When we talk about the culture of a business, you and I are very likely to use similar words because we’ve understood that those describe the culture. But we might mean different things by them. When I’m recruiting, when I’m talking to my candidates, pretty much every single individual I speak to will at some point, tell me that the culture of the business is very important to them. But when I asked them what they mean, I get a variety of different words coming out. It’s usually not a particularly succinct description. And in some cases, people are confusing culture with all sorts of other impacts, a lot of the time with industry. You’ll find people saying, ‘well, culture is very important. I couldn’t, for example, work for a tobacco company. Or an alcohol company.’ And actually, that’s got nothing to do with culture, really. But that’s their perception. So it’s very difficult for anyone in this process to really understand what they’re addressing. And if it is so individual, we can’t really generalise it.

So I can’t tell you that this company has an ‘orange’ culture and this company has a ‘green’ culture, because it doesn’t mean anything to anyone. So, how you can possibly match these things up is complicated, and a lot of it is coming down to, as I say, that individual relationship between one person and another.

That said, if you want to mitigate that risk as far as possible, it’s very helpful to make sure that the culture of your business, if you can define it is a genuine culture, is a strong culture in that it is pervasive in everything that you do. That then helps you attract and retain people who inherently fit that business because you’re slightly removing the fit from being a person to person fit, but a person to a broader idea.

And this goes back to what we were talking about in terms of communication and articulation of all concepts. If you can put a strong culture out there, if you can say, we, as a business believe these things, and it’s not just lip service to some nice words, but it’s the way we operate, the way we spend every day, then an individual coming in can recognise that. Now of course, it’s the skill to some degree of my industry to draw that out of businesses that haven’t managed to articulate it clearly. But it’s also very much the onus on that organisation and everyone within it, to recognise what that’s meant to be.

CC: Can you think of a couple of examples that would illustrate your point?

Many businesses will tell you that they do have a strong culture. I’ve two particular organisations and spring to mind that I work with quite regularly.

One is in the insurance world, a large well known insurance business that has an incredibly strong reputation for having taken diversity and inclusion into its cultural identity many, many years ago, not in any way jumping on a bandwagon, not doing this for lip service, but because they genuinely believe it. It’s at the absolute forefront of their strategy and it helps in the recruitment process. When I when I’m talking to candidates about them, I can wax lyrical about what they’ve done and what they’re doing in that space.

If you speak to individuals who are leaving that business for whatever reason, they always speak very strongly, very positively about that very part of the culture. It’s rolled out through the recruitment process and the organisation genuinely lives those values every day. And that is hugely helpful because if you buy into that, then you know what sort of organisation you’re joining.

Another business that I deal with is in the oil and gas industry and as many of the organisations in that space are absolutely obsessive about safety. You know, so it’s a risky industry and they need to be. But they go well beyond where you might expect them to in terms of taking that idea outside of the operationally risky roles, and putting it in the forefront of everything that happens. Every back office function is fully aware of this obsession with safety. And this helps them take it into the business. And it means that there isn’t just a few tick boxes, as I say, on their website, but people are living this.

And I think it really helps them as much as that insurance company in the recruitment process to be able to say, we live the values that we suggest. And you can see it written large, from the moment you walk through an office in central London as much as you would if you were on one of the more risky work environments like an oil rig.

And that works. And on the flip side of that is if businesses get it completely wrong, taking, for example, that oil and gas business if that was just ‘we’d better have a page on a website that say some nice things about safety’. You know, they’re risking lives. And if the organisation that tells you that they are absolute champions of diversity and inclusion and have been for many, many years, and it turns out that they don’t actually live those values, once you’re through the door, then the employee engagement, which is obviously very high on the way in, will hit rock bottom. Within days, they will have dysfunctional turnover that we see with struggling organisations and they will struggle to recruit and fundamentally that’s a downward spiral. So it’s not just a soft concept. If you can get a culture to be pervasive throughout your business, you’re going to be able to really help identify yourself in the recruitment market, and obviously that needs to be fed into the reward strategy.

CC: In fact, interestingly, these factors of diversity, inclusion, safety measures are all factors that we find in incentive plans as well whether they are in annual plans or long term incentive plans. These are absolutely examples of measures that we find in how people are being incentivised and rewarded.

Interestingly, when you’re talking about the insurance company, a number of organisations, over 300 firms in fact, have signed up to a Charter, which is called the Women in Finance Charter here in the UK. And the Charter contains four pledges. One of them, pledge #4r is around linking diversity targets to executive pay. And when you look at this information which is publicly available, when you actually look at it at a granular level, the transparency around a) the targets and b) the link back to executive pay is actually pretty ‘light’. So it’s interesting to see that people sign up to these pledges and want to do good, but you can actually see the genuine ones who are being more transparent as to what they do and it permeates throughout the culture of the whole organisation.

MB: That’s going to have an impact over time, because you’re going to see the businesses that really mean it. And they’re going to be the ones that attract the true talent that genuinely buy into it. It takes time to filter through. But if you’re just doing it for a tick box exercise, it’s a shorter thing.

CC: We are still in the COVID-19 time at the moment and see the challenges that it’s providing as well as increased social tensions throughout the world. How might the current situation impact the Reward world in which you and I work and live?

MB: I can it remains to be seen. And it’s difficult to predict the future, particularly when the present is so unpredictable. But I’m expecting a few things to come out. With a little bit of googling on online at the moment, you see lots of people making fairly grandiose suggestions of what they expect to come through. And obviously, not all of it is going to be true. But what I’m expecting to see is, having proved to ourselves in many, many scenarios that flexible working works ie. people have now been juggling their home life, their schooling of young children, with their work life, being perfectly productive at home in many cases, reducing their commute, which potentially allows a greater balance in their week taking out two hours of commuting a day.

You win yourself a day a week of work. And I think we’re going to start to see this obsession with working in an office space together, coming in to Reward strategies more overtly than ever before. And I think we’re going to find that the candidates who have enjoyed parts of this process, not withstanding the horror, that is the virus, but the shift in their working patterns has been welcomed by many people.

And I think if businesses are able to adopt different working patterns long term, they’re probably going to see a benefit in terms of being able to attract the staff that they want. And we’ve also seen with respect to the social issues that we’re currently experiencing, and just in general, perhaps, time to focus a little more on the implications of those things. We’ve been talking about physical and mental well-being, around D&I and the call of the masses of population to have that intrinsically part of their life. I think it’s going to significantly change reward strategies, probably in fairly short order.

But, you know whether it is significant and long-term, I don’t know. Fundamentally, if we’re still focusing on making sure that people are as engaged as possible, we need to listen to their requirements, which are so much broader than a fair day’s pay for a fair day’s work. If the businesses are seen to be looking after their individuals, understanding their needs, genuinely listening and reacting, I think those businesses are going to thrive much more successfully than those that try and shift back to the old way of working.

CC: It might be that some people don’t want to do take the extra time that they have, not committing to doing more work. They might want to rest, look after themselves or do something else with their spare time and their family.

People have been listening to us now for half an hour or so. What would you like them to do? What would be helpful from a work point of view? You’re clearly working with clients and candidates on matching their requirements. So what would be helpful in terms of articulating what we’ve discussed previously, from a Responsible Reward point of view?

MB: Well, that’s precisely what I’d like to see: more articulation of this very point.

So if we just go back to that point, I made a while back where well-being started to be talked about quite a while ago, but I thought it was a little bit of a false start. I remember having an individual who was a well-being specialist come to me and say he’s really struggling to find a role because nobody was talking about well-being. He was pulling his hair out because he could see that businesses were adopting strategies that he would call ‘well-being’ but they weren’t calling it that.

And I think that’s the situation we’ve got around Responsible Reward and bringing ESG into the Reward arena, because it’s clearly there to some degree. As you’ve pointed out, a lot of the things that we’ve talked about are fundamentally directly part of this, but I don’t see it. It’s not written on a job spec. There’s no line that talks about Responsible Reward, sustainability or ESG. Whereas if you dig into most businesses’ websites, you will find quite a lot that’s written about it.

In the same breath, I don’t see it on people’s CVs. Nobody writes about their specific Responsible Reward structure, their commitment to ESG in any way that brings it into common parlance.

So if that is the area that you’re operating in, if you can see those links, I’d really welcome seeing that as being articulated clearly, so that we bring this whole concept to the fore in the same way as we have done with well-being, with Total Reward with flexible benefits.

But this is a much bigger area. And I think we just need to chat about it more and more clearly.

CC: Yes, indeed, it is a growing trend in Reward and it needs to be more systematically talked about and streamlined in job descriptions and CVS.

Matt, you’ve been very kind sharing your insights, your knowledge and your recruitment work. If people want to follow up the conversation with you, what’s the best way to contact you?

MB: There are three things that I primarily do to help the Reward fraternity.

  • I focus my time dealing with HR directors and Reward directors who are looking to find senior people in the UK, Europe and further afield.
  • I also helped Reward directors and other senior level professionals understand their career development options. A lot of people that I talked to are just wanting to explore what might be available and that’s not necessary putting themselves in the market here and now. So chats around how careers develop in the Reward space are very much part of what I do.
  • And the third offering is to help all of these people with the structure and/or restructure of their Reward team, to optimise the efficiency that they have and to attract the right population to their teams. Particularly in a time like this when businesses are under pressure to not waste cost, restructure is high on people’s agenda. So if there are a lot directors out there that want to have a chat about what their reporting might look like, I’d be delighted to have a conversation with them.

Fundamentally, I love to chat!

CC: Great, thanks, Matt. So that was Matt Brooks, independent Reward recruiter.

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