The new normal comes with new rules. BalancedComp’s 2021-2022 Salary and Incentive Survey provides essential intel for the changing financial industry workforce. 

The Reset

Don’t worry about another shoe dropping, the “Big Workplace Reset” has already happened. The workers’ economy has been irrevocably changed and will most likely never return to where it was pre-pandemic, according to new survey data from BalancedComp’s Salary and Incentive Survey. In fact, though the trends from the past five years already showed major changes to the job market among financial institutions, pre-COVID changes led by Millennial and Gen Z work habits were measuredly slow, and were predicted to be sluggish in industry uptake. However, with new survey data from 297 organizations on more than 130 positions, we now know that these changes that seemed temporarily instituted are here to stay: the reset has come early. What we already knew was that these younger generations were going to demand a more significant work-life balance, better-defined company values and ethical responsibility statements, and faster churn between job roles and companies, but it seems as though we’re already seeing the results of these changes en masse, with fewer problems than originally thought. Contrary to the economy at large, these large scale changes aren’t affecting the financial industry as much as most, with 2021-2022 Survey data suggesting both predictable fluctuations (higher internal minimum wages, labor shortages, and remote work percentages), and a few unexpected changes (lower than average turnover and headcount changes), the overall salary outlook remains progressive and stable. There is still a lot of adapting that companies will have to do over the next decade, but the minimum viable product for keeping employees has branched out further, to include long-term, immediate flexibility in order to retain quality employees.

Compensation teams will become invaluable resources, whether they are sourced internally or externally with Human Resource consultants and data-heavy comp and performance review applications.

Remote Revolution 

Jobs are going to increasingly compete against nationwide pay because of remote workers prioritizing higher pay and better culture. After months of active trauma response from living through a global pandemic, some making more in unemployment than at their desk, months of time off to work on themselves, and everything else that came with the lockdown and the months since, workers know their worth, value, and tolerance more than ever before. These unprecedented times show no sign of slowing down in their willingness to upturn life as we know it, and their most notable target of recent is office space. Survey data suggests predictable major changes in remote work and includes strong breakdowns of pandemic pay practices that don’t seem to be leaving the compensation conversation any time soon. Reinvesting time, energy, and resources into compensation and comp policy at large will be the biggest differentiator as the world economy continues to move forward towards recovery. Credit Unions have been trending towards higher 401k matching, and employers’ health benefits at both Banks and Credit Unions have been surging. The minimum wage is rising above predictions, but effective compensation strategies will have plans to stay competitive. Those who don’t evaluate their policies and salaries will be left behind in the dust. Compensation teams will become invaluable resources, whether they are sourced internally or externally with Human Resource consultants and data-heavy comp and performance review applications.

The best thing a company can do for its employee retention efforts is to both reevaluate their internal compensation practices and double down on their diversity and inclusion efforts.

Reevaluations

Evidence shows that the worst-off workplaces are those who didn’t adapt to the flow of things at the beginning and are just now reacting to the new normal of higher pay, better benefits, and remote work, and odds are, those who are reacting now aren’t happy about it. With employees more sensitive than ever to workplace culture and outside recruiting, retaliation from internal leaderships who are resistant to change will define the success or failures of companies moving forward. Retaliating against employees by contrarily asking for opinions just to ignore the answers will end up hurting a bottom line more than just not asking— though not asking is still a bad option for moving forward. The best thing a company can do for its employee retention efforts is to both reevaluate their internal compensation practices and double down on their diversity and inclusion efforts. Recognizing high-quality employee achievement, engagement, and effort will be hallmarks of successful employee retention programs. Nobody wants to feel as though they are working hard to be a company’s top-performer while ending up with the same crumbs that someone who shows up 2 hours late every day gets.

One thing remains clear through all of this, though: Clean, interpretable data is important to build the most effective comp strategies. Compensation and Incentive programs will have to evolve to become more targeted and responsive while becoming less haphazard and unclear as the new normal takes effect.

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