My OPinion – New York market report – Compensation and Benefits

Jamie Newton – Partner | Reward

What’s going on?  What’s really happening?  What’s on the radar for Compensation professionals in New York at the moment?  What’s keeping Benefit professionals awake at night?  What big moves have happened in the last 6 months?

All the above are perfectly valid questions, that I will, of course, attempt to answer.  However, the overriding theme when I ask my US Network any of the above are basically muffled responses usually involving the phrase “I’m the busiest I have ever been and I don’t have time to think about this right now!”. Now usually I would pass this off as people getting caught up in year-end, comp round, benefit renewals etc.  This year, however, feels different.

This year literally everyone is busy, everyone is tense, and everyone is on edge, no one has time to talk/ think/ breath/ or reflect.    This seems to be the state of the NY Comp & Bens arena at present.  The year has been busy but in the last six months, things have ramped up steadily.  Common themes people are mentioning to me are:

  • Cost control is becoming a recurrent theme.
  • Hiring talent into the comp and bens space is an absolute nightmare.
  • Being asked to do more with less – less spending, less resource but the need for better analytics, better data, more rationale, seems to be increasing.
  • None of the banks are having a “good year”.
  • Bonus pools are on the whole down to static.
  • Many US firms are reviewing or changing their national healthcare carriers.
  • Wellbeing, Wellbeing, Wellbeing!
  • The demand for pay transparency at all levels seems to be creeping into every conversation…
  • 2020’s election, US-China Trade wars, Trump’s impeachment proceedings – all of it doesn’t help with economic uncertainty – Boards are twitchy, which inevitably creates more work for Comp and Bens folk..

The above are all challenges that are creeping more and more into the public domain.  The GM strike made the headlines of every major news outlet, all of them commenting on the need for better pay transparency and better distribution of profits/ wealth across all employees.  CEO pay ratios have moved from being a badge of honour that “you’re the big dog on campus”, to now being arguably seen as shameful and something to be questioned.  Healthcare reforms (some of the proposals are eye wateringly aggressive) are one of the cornerstones of political debate amongst the democrat candidate hopefuls.  To sum it up, it was put to me by a well-known Head of Total Rewards in NY on my last visit in October that Compensation & Benefits has not had this level of attention and public commentary since 2010.

It’s this noise that is in part creating the increased workload because on top of annual processes, people are being asked to aggressively model scenario after scenario around “what if’s”. They are being asked to come to Comp committees armed with reams of data, to discuss pay equality, gender pay gaps, better pay transparency, on top of the usual mountain of info they need in the back locker! The demands placed of both compensation and benefits professionals seems to be ratcheting up in New York, and along with that, you would hope that additional resource would be allocated.  Unfortunately for many, this isn’t the case and with purses being tightened as we approach year-end one can only hope that we see some form of a hiring spree in January!

On the whole, the picture we have is that the market has been active, and businesses have looked at a blend of both investment and replacement hires over 2019.  The challenge many candidates have faced is the length of recruitment processes along with a real lack of communication from clients from interview to offer.  Clients advertising directly through channels like LinkedIn has long been the main source of reference for the Compensation & Benefits community when looking for a new challenge.  In a market such as New York where talent isn’t being brokered effectively by recruitment or search consultants, clients have had the luxury to be able to tap up the market themselves, with a certain degree of success.  However, the lack of transparency in online adverts on salary/ level/ breadth of the role often leads to wasted efforts where people apply and from the get-go aren’t right for the vacancy.  The frustration from both clients and candidates to identify the right compensation experience or right exposure to employee benefits is becoming very evident to us.

The challenge hirers often have is that overall most CV’s of compensation and benefits professionals tend to look very good.  They tend to have robust background with good tenure and progression and hence most of the time on paper people look “relevant” for most positions.    The story that the CV doesn’t tell you is the Type of compensation work they have been involved in and how relevant it is for the potential employer.  Often the CV doesn’t give you a rundown of the regulatory position of the firm they are coming from and how that might have given them experiences that are important to your firm.

Often, and for some bizarre reason, compensation professionals in particularly don’t add the exact detail of the type of executive compensation or equity compensation work they have delivered.  Words like ‘Carried Interest’ and ‘Co-Investment’ don’t seem to make it into the CV and are simply covered with “Managed the firms equity compensation”, which can mean a whole host of things! It’s only when we ask for clarification or understand the type of comp structure their firm will typically have that we can dig out the depth of their experiences.  Most internal recruitment leads will be scanning a resume for key phraseology and terms that hit the job brief; if they aren’t there then you can’t expect them to guess about your credentials??

The New York market seems unique in this respect.  Many clients will attempt to hire compensation or benefits professionals through various direct channels and will start off with a strong looking batch of CV’s.  Interviews are then arranged, which takes a couple of weeks, hiring managers then commence the interviews over several weeks and more often than not experiences don’t match up to the idiosyncrasies of the brief and whilst many pleasant conversations have been had, we are no further forward in filling the vacancy.  So usually between 10-12 weeks in a client will then be in a situation where they are effectively starting from scratch, re-advertising the role (which goes down well, across a small and well-networked community) and then engaging HR agencies to “have a go” at finding some untapped talent.  Again, this often fails because you aren’t dealing with recruiters who really “understand” the Compensation or Benefits profession, they cover Reward as part of their wider HR remit.  So, the client ends up getting another batch of candidates who look good on paper but aren’t carrying the right experiences and relevance.  Six months later having tried to hire a relatively standard role, you are again back at square one feeling like you have exhausted your options.  Some clients have managed processes very well and been fortunate to land talent effectively during 2019, but many have not.  It’s been an arduous nightmare filled with pitfalls and frustration.  Understanding the above finally made it clear to me how it took a well-known bank nine months to hire a Compensation Associate!!!

To sum everything up, the market for Compensation & Benefits professionals across New York is very much alive and kicking.  Finding the right talent remains a challenge for many clients, but this will hopefully evolve.  Economic uncertainty, Political uncertainty, elections, trade wars, are all very much concerns for many businesses and this often doesn’t help the labour market move quickly and effectively.  Added to this with increased scrutiny around pay, employee wellbeing, financial security, professionals in compensation and benefits are being asked to deliver more, often without the resource to match!  2020 will inevitably be a year of change in NY, whether this is positive or negative is something I can’t predict.  The one thing for sure is that the need for talented professionals in this niche market will remain strong.

If you have any questions or comments or are considering hiring compensation or benefits professionals into your team please do feel free to reach out to me at jamienewton@oakleafexecutive.com

Or call me on (212) 381 -9947 or my mobile +44(0)7711 810 99

Jamie Newton