Change will benefit the reward industry - SARA

JOHANNESBURG - Nov. 11, 2014 - PRLog -- With increasing levels of competition across around 150 million businesses worldwide and with 2,4 billion adults connected to the Internet, the impact of technology as a catalyst for change will be felt for years to come. This discussion was at the forerunner of SARA’s (The South African Reward Association’s) Annual Conference held in October with the theme entitled “The Evolution of Reward... Lead... Innovate... Progress.”

The event attracted over 200 delegates across industries, and they were provided with some interesting food for thought about the technology and the reward industry, its current status and the overall vision for the future.

“Ongoing change” was the central theme and the Conference opened with a presentation by Michael Jackson who offered his insight into the future. His session, “The Road Ahead 20:20 Vision”, explained that as society and culture evolves, individuals have a clear opportunity to both reinvent themselves, and play a key role in the development and growth of business in keeping with the times.

Jackson spoke of the need for people to change their perceptions and thoughts about their own situations and the world more broadly.

“Only by creating our own paths will we change our destiny. This means avoiding routine and not simply accepting everything that we are told to do,” said Jackson.

The two-day Conference afforded the audience an opportunity to better understand the Reward industry dynamics, specifically in relation to how HR practices have changed and adapted to align to current market requirements.

Another current thought leadership concept centres around the notion of “employee engagement”. Marie-Claire McLachlan from Culture Code said 13% of employees across 142 countries globally are “engaged” in their jobs. “In South Africa, only 9% of employees are engaged in their jobs – in other words, 9% of employees work really hard, are happy to be there, work late and love to go to their jobs everyday.”

To elevate and accelerate employees, businesses are advised to select the right managers and staff, to develop employees’ strengths and take a more cognitive approach to enhancing the wellbeing of employees, including emotional wellbeing.

Paying it forward

Ray Harraway, Partner at EY, provided a detailed analysis of South Africa’s current pay governance environment and the direction this is taking.

He said pay governance is about balancing both risk and reward, and this is a vital component of the overall reward strategy. “The risk is that pay plans reward executives incorrectly or unethically, which can cause significant reputational harm. The question is, do you have the right risk culture?”

Harraway pointed out that the issue of higher fixed pay can be addressed, in part, through governance constructs such as deferral mechanisms. “We need to defer bonuses to match pay-outs,” he said.

The current environment is influenced by many different regulations, including the Companies Act, the EE Act and Code, Integrated Reporting requirements, LRA amendments, CRIS, IFRS, The Banks Act, proxy voting of institutional shareholders at Board Meetings, increased shareholder involvement and awareness, minimum wage legislation, pending pension reforms, amongst others.

Reinforcing the core theme which centred around the need for change and that the reward industry must adapt accordingly, economist Dr Roelof Botha outlined a number of challenges that characterise the local SA labour market and wage situation – which he aptly described as “the Achilles heel of the South African economy”. The challenge for South Africa centres around how to achieve higher productivity outputs given the increasingly militant and unsustainable demands for high wage increases in an environment characterised by a scarcity of the right level of skills required.

HR in a digital economy

The relevance of Human Resources and specifically Reward practices in the digital age was a topic of much discussion.

Lee Naik from Accenture said that according to global projections there are likely to be 212 billion digital devices by 2020! We need to think about and proactively anticipate what all this technology can provide for us in terms of predictive analytics and then consider what to do with that information in the best interest of all.

From an HR point of view, there is a greater demand by employees for transparency, accountability, engagement and collaboration. The impact of technology plays a huge part that cannot be underestimated and the pace of change will continue and we should anticipate for this.

Peet Kruger, outgoing President of SARA, said the Association is very pleased with the level of discussion, the quality of insight and attendance at this year’s Conference.

“It is clear that the Reward industry will continue to grow its influence as the broader business landscape evolves and that it has the tenacity and expertise to deal with change. This bodes well for the sustainability of models and practices that work,” he added.

Lindiwe Sebesho from Alexander Forbes was elected as the new President of SARA and when asked to give some insight on the future of rewards, she commented that although our continent and especially South Africa is progressive we still face a lot of challenges: challenges such as unemployment, constrained growth, lack of skills, low productivity, to name a few.

“The ability of organisations to develop their employees and get the best effort from them is an important consideration for the solutions that will help us address these challenges. I therefore look forward to working with the newly elected executive committee, portfolio teams, the secretariat, our members and various stakeholder groups as we continue to advance the total rewards profession. Our member value proposition reflects our passion for the profession and this is what I believe will continue to guide our efforts to evolve our offerings in line with the aspirations and changing needs of our members and the societies they operate in,” she concluded.