Compversation #3 - Weren't Things Better Before?

Innovate or die. 

The mantra is so pervasive that it’s become cliché. And yet, in PwC’s Annual Global CEO survey, 4,410 business leaders came to an almost unanimous consensus: transformation is essential. 

The race for innovation is in full swing, from large corporations to small businesses. Product teams are constantly striving for improvement, and marketers are always pushing the boundaries of creativity to find new prospects. I don’t feel we see this kind of frenzy in the HR department. In fact, I sometimes wonder if HR is the only function in modern organizations where we default to tried-and-true methods rather than exploring promising (but uncertain) new approaches. 

But, with major changes on the horizon for our field (pay transparency, of course), particularly in compensation management, we, too, will soon need to embrace the challenge of reinvention. 

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Are we more risk-averse than other departments? 

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In HR, we tend to be pretty set in our ways — and that’s only natural. 

After all, taking bold initiatives has never been part of our mandate. Instead, our role has always been about mitigating risks and tempering the enthusiasm of our more forward-thinking colleagues. 

Above all, we are the guardians of our organisation’s economic, legal and social stability. So it makes sense that we see big changes not as opportunities but as potential dangers. 

Beyond this inherent caution, the nature of our work doesn’t easily lend itself to experimentation simply because it involves human beings. In tech, launching a new feature and then pulling it back if a bug is discovered is relatively simple. Marketers can easily pause a campaign that’s not producing the expected results. But for HR, this ‘test and learn’ approach is a lot more complicated. 

That’s because each HR decision impacts real people. That means they’re not just experiments but established practices that are difficult to undo. Plus, even if we could overcome all of these barriers to innovation, there’s another issue to consider: HR are facing alarming levels of burnout. According to a survey by Personio published in  HR Magazine, 52% of HR professionals have experienced burnout in the past 5 years, and 34% are considering leaving the industry. 

In HR, we often lack time and resources and are under pressure to do more with less. Is it any wonder that we sometimes lack an appetite for risk (or even just the bandwidth to innovate)?

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When ‘wait and see’ becomes inertia

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Four-day work weeks, remote work, unlimited vacation, and pay transparency are just a few of the many promising trends that are sparking interest among the HR directors in my network. Now more than ever, everyone is talking about the ‘future of work’. The only thing is… it’s rare to see this enthusiasm transformed into concrete action. 

In HR, the most common approach is to wait and see what everyone else is doing. This allows us to observe other companies' experiments, learning from their successes and failures without taking any risks ourselves. 

But this widespread wait-and-see attitude can quickly turn into paralysis. In other fields, everyone wants to be a pioneer. But in HR, no one wants to be the first to take the plunge. So, what will break this stalemate? Historically, it’s usually unexpected circumstances that force organisations to reinvent themselves overnight. 

The COVID-19 crisis is a textbook example: companies that had previously been closed off to the idea of remote work were suddenly forced to implement new ways of collaborating — immediately and at scale.  

Since then, the issue of remote work has become unavoidable, and every organisation has had to define its own approach. And the compensation and benefits field is heading for a paradigm shift that will be just as profound. 

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Doing nothing is also a risk 

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We’re steadily moving towards a world where pay transparency is the norm. The EU Pay Transparency Directive, approved in 2023, will soon be in effect across Europe. Four countries (Poland, Sweden, Belgium and Ireland) have already prepared draft legislation.

However, while some start-ups have made progress towards transparency over the past few years, European companies are generally not ready. The challenges ahead are unprecedented in the history of work. That means the tools we’ve always used will not be enough — we need to find new ways of thinking and acting. 

However, true innovation doesn’t happen by chance. Companies must seriously consider and reflect on their compensation policies to ensure they’re prepared.

In this situation, inaction is no longer a safe bet. To do nothing is to expose yourself to the risk of having to publish salary data that’s inconsistent or difficult to justify.

That’s why it’s crucial to adapt now instead of waiting until we no longer have a choice. I often advise the comp & ben managers I work with to act as if their salaries could be leaked tomorrow to avoid being caught off guard (as happened a while ago to Microsoft). 

One thing is sure: the next generation of HR and comp & ben professionals will have to embrace innovation and calculated risk-taking as a key part of their strategies. To do this, artificial intelligence and digital tools can be valuable allies. This is a subject I’m passionate about, which I had the chance to discuss with two specialists in a webinar. I hope to explore this theme in greater depth in future issues of this newsletter. 

But for me, the ability to break free from inaction is not just about technology. It’s about doing it together. Most of the comp & ben managers I know are in the same position: groping around in the dark for decent solutions to new problems. Rather than waiting to see how others will handle things, we should be discussing, sharing our questions and initiatives, and exploring the risks and opportunities together. 

The specialists are clear on one thing: innovation is a collective effort. We can find ways to face new challenges, but only if we work together. 

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