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Despite the recent downturn in the U.S. economy and the ripple effects that are beginning to be felt in Europe, the so-called war for talent is still raging. Companies may be cutting staff on one side, but they are still struggling to hire specialist skills on the other. And that means that these high performers can still ask for higher and higher salaries and greater reward packages.
According to Pasquale Mazzuca, executive resourcing and development director with Belgian telecoms giant, Belgacom, "the best paid are those that bring in the bacon. That means that sales people are usually at a premium and finance professionals are also well compensated. With the dot.com era," he adds, "there has also been an explosion in the demands for web design skills."
Further down the corporate chain, there seems to be a real increase in the demand for support functions too. And in some cases, even executive assistants have seen their compensation levels go up ten to 15 percent over the last two years.
Neil Irons, a senior partner with management consulting firm Hewitt sees four distinct developments that are impacting the way people get rewarded in the European company of today. In essence, he says, "we are moving from:
- Historical performance comparison to peer company comparisons
- Focus only on the number to focus on holistic view of executive performance
- Cohesive pay structures to flexibility to recruit talent
- Compensation that equals cash and pension to encouraging employee share ownership
Much of this, adds Irons, is, "linked to stock performance; so giving employees at all levels equity in the company is becoming the rule rather than the exception."
There are, however, some experts that seriously doubt that this trend will work. They believe that performance-based programmes encourage wrong and narrowly -- focused behaviour. And, as many people have discovered to their detriment, stock options do not always provide greater levels of reward. Arthur Janta, a Brussels-based partner of executive search firm, Russell Reynolds, predicts that, "2001 will usher in great changes in pay and compensation practices. Last year, there was a great technological bubble, people were seduced and even blinded by it. Many people left older, more established companies to go and work with new, Internet start-ups," he recalls. "Often, they accepted much lower salaries in exchange for stock options," he adds. But following the collapse of so many dot.com companies, Janta believes that the "dream is now much more under control, that the bubble has now burst."
Although IT will continue to be in demand, Janta considers the days of overly inflated pay packages for these professionals to be over. "There will be tighter control on the market," he says and it will "revert to more normal levels." He also predicts that the same will follow for those other functions whose packages are currently recording record-level euros, francs, and pounds.
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