Radford Perspectives

Introduction & Forces to Watch

Join us in exploring the biggest rewards trends and challenges facing technology and life sciences companies today.



Introduction

Winning in Asia, Making Pay Equity and Pay Transparency Real & Advancing People Analytics

Across the technology and life sciences sectors, growth is the name of the game and it’s being accomplished through impressive innovation. In a time of global growth and expansion, coupled with market volatility and ongoing geopolitical surprises, innovation-based organizations have experienced great opportunities for growth. At the same time, these high-performing sectors face more and more social pressure to be better, be bolder and lead the landscape of talent and reward practices. These companies have new competition from traditional line sectors in the digital revolution with an imbalance of supply and demand for talent— not just in the United States (US) but a number of global growth markets as well. As all companies look to find ways to improve customer experience, they are also required to innovate the employment experience for five generations of talent with different wants and desires. There is no time to stand still as the competition for talent and market dominance continues unabated in all sectors, and particularly for our technology and life sciences clients. It is time to reimagine how business can move faster with new ways to address talent and rewards strategies.

Human resources, rewards and talent professionals are at the center of it all. They are at the core of a company’s culture and pulse— the bridge between leadership and employees and between perception and reality. We must reimagine our roles, and be bold in three key areas: understanding the global landscape, addressing pay equity and pay transparency, and leveraging the full potential of people analytics.
 

 

 

3

Critical areas of
risk and
opportunity
 

 

Winning in Asia
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Making Pay Equity and Pay Transparency Real
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Advancing People Analytics
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Winning in Asia

We've all known for years that Asia is a land of great opportunity for technology and life sciences companies, both in terms of accessing new markets and world-class talent. And while searching for growth in Asia is not a new endeavor, in recent years, the conversation around setting up shop in the region has undergone a fundamental transformation. It’s not just about foreign companies looking to expand into Asia anymore. Now, fresh competition is coming from explosive homegrown firms led by Asian-born entrepreneurs. These companies are quickly becoming market leaders, attracting top talent with increasing ease, and setting up shop themselves in the US and Europe.

For HR professionals in the West, this means centrally-managed, top-down approaches to rewards and talent no longer work as well. Nor does using one-size-fits-all country-level data— simply put, nuance matters. What's more, companies born in Asia are quickly adapting to Western-style pay programs as needed, aggravating the competition for talent even further.

These shifts place a premium on the cultural underpinnings of a business to manage the employee journey, from hiring requirements, to career paths and mobility, to development and mentoring as well as pay. Companies need to create more flexibility to meet the ever growing and evolving needs in the markets, as well as room for scale, both in terms of headcount and geographic footprint.

 



Making Pay Equity and Pay Transparency Real

While it's always exciting to look externally at new opportunities for growth, what’s happening inside your organization today matters a great deal. Employees want to know how their pay is determined and they expect transparency and fairness to be table stakes in the pay-setting process. In some cases, it’s the law. Companies in California, Massachusetts, New York City, the United Kingdom and several other jurisdictions all face new pay equity-related regulations this year. However, in the technology and life sciences sectors, where progressive people policies have long been cultural norms, pay equity and pay transparency are much more than legal issues. They are business imperatives. The market for talent is as tight as ever and employees will increasingly seek out organizations where fairness is part of the core employee value proposition and leaders walk the talk.

As a result, creating sound career architecture and leveling systems linked to reliable market intelligence has never been more important. People managers, HR leaders and compensation professionals all need to be able to answers questions about pay and performance with confidence and clarity grounded in consistent practices and policies. At the same time, in today’s competitive global market, flexibility is needed as well to make intentional distinctions free of bias, particularly unconscious bias that can creep into a company’s culture. Managing this difficult balancing act will be imperative and be the way that companies differentiate themselves in the market for talent. Companies need to take a hard look at how they make compensation decisions, regularly audit their data and policies, and be more open-minded about exploring new ways of doing business.



Advancing People Analytics

In the world of big data, HR professionals must embrace the promises of exacting insights from data. When it comes to topics like pay equity, individually customized rewards, predicting turnover and even connecting the dots between wellness programs and people performance, knowing where to start is a daunting proposition. Fortunately, people analytics can help. Using statistical tools like multiple regression models and clustering analysis— the sorts of things we all hoped to forget after college— every company has the ability to sort through mountains of data to extract game-changing insights. The only question is: which organizations will make the investments in people and tools needed to harness the potential of analytics— moving HR from a cost center to a more impactful business leadership role?

Once companies take the plunge, the results are surprising and empowering. For example, when it comes to pay equity, detailed multiple regression modeling often reveals solutions must go far beyond one-time pay adjustments. Delivering lasting results may start with how pay is set for new hires and promotions, but ultimately it means finding and fixing unconscious bias in all aspects of a company’s culture including how diverse talent is sourced in underrepresented job functions. To some, these remedies are obvious. However, for many others, analytics have the power to move conversations from subjective assumptions to quantitative measurements of the impact of specific variables and policies on pay outcomes. And in many cases, this is what it takes to move the needle in the board room.


 


What's Next for Radford?

We can't ask our clients to reimagine their work without taking the plunge ourselves. Radford now has a rapidly growing office in Singapore, a dedicated people analytics practice, and is actively working with dozens of companies on pay equity and pay transparency issues. We wouldn’t be making these investments without you. Many of you are already reimagining what you do and how you work, and we look forward to tackling these challenges together in the years ahead.

Thank you,
David and Rob
 

David Knopping
Partner, President of Radford
 

Robert Surdel
Partner, Head of Radford Consulting
 

Forces to Watch

Fairness and transparency are not a passing fad, they are the new normal
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Most compensation philosophies still talk about things like pay for performance, balancing risk and reward, and aligning incentives with shareholder results. All of these concepts still matter a great deal, but in our view, a fundamental shift toward focusing on the fairness and transparency of rewards is underway. At the behest of governments and society-at-large, compensation professionals need to be ready to take action now. It is not only the right thing to do; it is good for business.

Failing to make fairness and transparency a priority can put your company at legal and reputational risk, but more importantly, it can also cut your organization off from vital talent pools. Companies need to dig below the surface to determine why they have any unexplained pay equity gaps and quickly implement cultures that remove as much unconscious bias as possible in talent and rewards decision-making processes. Employees now expect companies to be open-minded, inclusive and fair. And in an era where pay information is more widely shared without hesitation on both a small and viral scale, employers need to be proactive in telling their talent and rewards story. Make sure you have a fair and transparent narrative to tell.

Connect your mission and rewards philosophy to create a compelling employee value proposition
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Across the technology and life sciences sectors, hyper growth is the norm, forcing everyone to compete for and retain scarce technical and scientific talent in an intensely crowded field. In this type of market, out-bidding the competition isn't a sufficient strategy. Companies must find ways to better integrate their overall mission into specific talent and rewards strategies that create highly compelling employee value propositions.

In our view, this starts by focusing on two key pillars. The first pillar is creating a total rewards philosophy that is deliberate, strategically-aligned, engaging and highly transparent. The second pillar is thinking holistically about the role rewards programs can play in facilitating positive employee experiences at every career stage, from start to finish. Becoming an employer of choice isn't about getting good survey results— it is mindset focused on constant reinvestment and reimagining of what is required to empower employees to bring their best to the workplace.

Winning together, while differentiating for top talent
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If we all know top talent can move the needle faster than everyone else, why is it that companies consistently shy away from taking bold steps to differentiate how they reward their best value creators? The answer is often two-fold: limited compensation budgets and equity pools that are usually spread too thinly across organizations, and HR departments that are leery of creating “have” vs. “have-not” classes of employees at a time when fairness is more important than ever. As a result, efforts to differentiate for key talent can suffer.

To break this cycle, companies need to be both bolder and more flexible in how they incentivize top talent at all levels, not just the executive ranks. To truly incentivize and retain your top talent, you must use all of the tools at your disposal, including merit increases, bonuses, long-term incentives, career opportunities, training, mobility, flexibility and more. However, you don’t have to give everything to every top performer— you can be selective in how you deploy these tools and work with top performers to craft specific plans that work best for them. Another key in this day and age is to be transparent about how new career opportunities and rewards decisions are made so they are perceived to be fair and merit-based across your organization.

Technology and life sciences companies are expected to lead on diversity and inclusion, while also facing extra scrutiny
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The workforce continues to become more diverse and now includes five different generations working together. In response, more companies are introducing flexibility and customization into their talent and rewards programs. However, companies still need to do more to promote diversity and inclusion, and eliminate bias in their entire set of talent practices— from workforce planning to succession planning to building cultures of fairness and transparency.

The pressure is particularly high on technology and life sciences companies, where leadership, technical and scientific roles still tend to be male-dominated. And whether you believe the extra scrutiny these two sectors face is fair or not, the fact is, innovative and high-growth companies changing the world tend to attract a lot of media attention. As such, the airwaves are filled with stories of companies not moving fast enough to adapt to changing norms or failing to hold management accountable for troubling scandals. We know this isn’t true for many of our clients in the technology and life sciences sectors, who are genuinely concerned with promoting more diverse and inclusive workforces; but, it’s also true that companies are being held accountable for their diversity and pay equity initiatives in ways they haven’t before. The day has come for companies to double down on efforts in these areas.

The global vs. local dilemma: building a balanced view to support global mobility and growth
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It has never been more important to understand the nuances of local markets in order to compete on the global stage. When assessing your company’s growth strategy and expansion opportunities, it is always important to analyze local talent practices and pay trends as part of your due diligence. This will help you understand supply and demand dynamics in essential micro-markets, must-have perquisites and benefits, turnover rates, and key legal requirements to watch for, all of which can vary significantly from region to region within countries.

There is also a shift underway in terms of why companies globalize. Initially, efforts to globalize were primarily driven by the need to get closer to new customers and to control costs. While these aims still matter, expanding globally, including offering top talent more mobility options, is now an essential talent strategy. Multinationals headquartered in China, Europe, India and the United States are all entering each other’s home markets to chase talent, not just new buyers. This ups the ante for everyone. Companies must have a compelling high-level rewards strategy and philosophy that ties things together around the world, but also be flexible enough to meet hyper-local demands as new talent competitors open up shop next door.

 

 
 

Meet Our Authors

David Knopping
Partner, President of Radford

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Linda E. Amuso
Partner, Chairperson of Radford

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Robert Surdel
Partner, Head of US Rewards Consulting

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