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Annie Hayes



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Editor’s Comment: Reward – the cash-cow


Annie Ward

‘Boom not bust’ was the message for reward specialists at this year’s CIPD conference and the good times it seems are rolling; the war for talent has catapulted demand for experts in the field raising the roof on HR ‘reward’ earnings; Editor’s Comment prods at the rich pickings on offer.

The ‘smell’ of success was certainly in the air at Olympia this year and not only because the tickets included a sit-down feast of rack of lamb and crème brulee.

Page five of the CIPD’s 2005 reward survey was the one to be ear-marked and digested.

What do they earn?

According to their stats, the median base salary for a senior reward practitioner is £50,050 per year. This compares with the typical salary of £38,000 for a senior general HR manager.

It is true to say that salaries do range by sector and size of organisation, however. While the median salary for a senior reward practitioner is £50,000 in the private sector, colleagues performing the same function in the public sector can expect much reduced earnings of £37,659.

Size also plays its part. Senior reward professionals in organisations employing between 1,000 to 4,000 staff earn £50,227, a figure that rises to £58,000 in companies employing more than 10,000 staff.

Across the levels, a junior reward worker might expect a salary of £24,860 while a reward head could pull in as much as £82,050.

In October, the CIPD announced that reward managers earn 32% above the average salary.

As for the opportunities, well according to the CIPD’s survey findings organisations have been taking on more reward practitioners over the past two years and demand for their expertise is expected to grow.


The economy and labour market have played their part in the good fortune of reward professionals.

David Smith, Economics Editor of the Sunday Times told delegates that economic success has fuelled, “Prolonged low inflation and a tight labour market.”

Official statistics out this week reveal that the labour market is indeed at near full capacity, the number of people out of work and claiming benefit has fallen to its lowest level since June 1975.

The result of these economic conditions is a war for talent. Put simply, companies have to work harder than ever before to lure high-flyers into job-hopping and as Maslow’s basic needs of pay and safety are satisfied, individuals start to focus on lower levels ‘wants’ including work-life balance.

The time for being ‘grateful’ for having a job it would seem is now over. A raft of recent surveys have confirmed this.

Research from Lloyds TSB and Working Families, released in January show that the desire to get a better work-life balance wins out over more cash or climbing the ladder.

The top three career New Year’s resolutions are:

  • 1. To get a better work-life balance – 67%

  • 2. To ask for a pay review – 22%

  • 3. To go for a promotion – 19%

Speaking at the reward conference, Paul Bissell, senior rewards manager at the Nationwide Building Society and the CIPD’s vice-president for reward said:

“Organisations are realising what a powerful lever reward is and how it needs to complement their other business strategies, whereas historically people have tended to view it in glorious isolation.”

So it would seem that the big players are required to become ever more inventful when it comes to designing their reward packages. Not only to enable them to hire in talent but also to retain it.

The trends

So what does the job in hand involve? Vicky Wright, a consultant specialising in reward for the last twenty years who currently heads Ernst & Young’s performance and reward team likened the challenge to composing music.

“When pay is such a big cost, you’ve got to have a strategy in place to manage it, but reward can’t just be changed over night there has to be a plan,” said Wright.

So what are the choices?

Infinite according to Wright who presented delegates with three very different pieces of music:

  • 1. A piano piece by Bach (a single instrument, transparent and easy to hum along to)

  • 2. Eric Clapton, Unplugged (participative and informal)

  • 3. A piece by Messiah (difficult to communicate but very engaging)

The point Wright was getting across, is that businesses are very different and all the elements of the organisation must be considered if a reward strategy is to be successful, from the HR drivers to the reward goals, culture, weaknesses and strengths.

But warns Wright, don’t try to do anything really adventurous unless you’ve got the talent to do it.

Referring to Michael Porter’s 1980, Competitive Strategy she quoted: “The A implementation of a B strategy is better than the A strategy with a B implementation.”

What does the future hold?

Pensions have catapulted the issue of pay into a new light. The research from the CIPD survey shows that reward managers have taken these concerns on board and are starting to adopt more strategic, integrated and holistic approaches. Just under half of respondents have adopted a reward strategy, while the number of organisations with a defined reward function and the number of specialist staff is still growing.

With conditions ripe for trying new approaches to reward including ‘cafeteria’ style benefits, reward specialists may not only enjoy fruitful earnings but may also get the opportunity to pioneer some new strategies. What is certain is that with favourable labour market conditions and attractive salaries on offer becoming an expert in the field may not be a bad thing.

Changes in the public sector are also paving the way for the growth of the function, including the NHS Agenda for Change as well as the public sector pay reform.

The CIPD have caught onto this and made the smart move of offering a qualification in reward for the first time and if the take up rate is anything to go by practitioners out there are one step ahead. It would seem as though the cow is starting to be milked.

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Annie Hayes


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