Towers Watson research: Pay issues are most important HR priority in financial services sector

A third of HR professionals from the financial services industry view pay issues as the most important HR priority, according to a poll conducted by Towers Watson.

The Towers Watson Global Financial Services HR Study 2011, which involved 130 HR professionals from over 60 of the largest global banking and financial services firms, also found that 23% value talent acquisition and 20% value the redesign of the employee value proposition.

Two-thirds believe that public service executive base salary levels have not yet stabilised while there was general agreement that base salary levels for lower-level employees have stabilised.

Over 40% identified risk adjustments to financials or incentive pools as the most expected shift in pay policies in the next 12 months. According to a poll, the shift represents a stronger focus on pay issues rather than other changes such as linkage of deferred vehicles to business unit performance (16%) or longer vesting periods (15%).

Mark Shelton, global co-lead of the talent and reward financial services practice at Towers Watson, said: “Global financial institutions face many issues that connect human capital challenges across pay, performance, risk, regulation, culture and governance.

“Given the dramatic evolution of pay policies and structures, sufficient linkage to other human capital priorities such as talent management, risk culture and engagement are essential.”

Chris Fabro, global co-lead of the talent and reward financial services practice at Towers Watson, added: “The financial services industry is beginning to reshape itself in response to altered business environments and strategies.

“Many of these organisations need to fundamentally align their talent management and workforce practices to shifts in the business environment.

“Top of mind will be pay strategies that reinforce the desired culture; ensure market competitiveness; differentiate among employee’s roles, skills and performance; and deliver the right employee behaviours at a cost the organisation can afford.”

Read more articles on pay issues in the financial services industry