(From BenefitsCanada.com) -- New compensation regulations adopted in the U.S., UK and other countries following the financial crisis are causing global financial services companies to focus on talent management and on rewards beyond pay to help them attract, retain and engage top talent, according to a poll from Towers Watson.
In the U.S., both the Troubled Asset Relief Program (TARP) and the Dodd-Frank Wall Street Reform and Consumer Protection Act require financial institutions to review and disclose whether their compensation programs encourage executives, traders and other employees to take “excessive” risks. Similar rules were adopted in many European companies following guidelines issued by the Financial Stability Board in 2009.
“Traditionally, the financial services industry has differentiated itself in the market for talent by its ability to offer above-average incentive compensation opportunities,” said Mark Shelton, global co-leader of Towers Watson’s talent and rewards financial services practice. “With the new regulatory restrictions limiting their flexibility in that regard, global companies are focusing more on talent management and redefining the ‘deal’ with their people.”
Indeed, when asked what issues concerned them the most, nearly one-third (31%) of poll respondents said redesigning the employee deal or value proposition. Concerns about employee engagement ranked second (25%), followed by compensation issues (22%). When asked about their primary areas of emphasis over the next few years, almost half (47%) pointed to improving leadership effectiveness in their organizations, while 29% said focusing on redesigning key programs, including performance management and career development.