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Rewarding talent the Fintech way

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Beyond Data

By Sambhav Rakyan and Edward Hsu | August 14, 2018

Organisations need innovative reward strategies to attract and retain key digital talent. Here’s how the Fintech approach is leading the way.

Global Fintech investments altogether amounted to almost USD 40 billion in 2017, with some of the largest deals landing in Asia Pacific’s emerging Fintech hubs in China, Hong Kong, India and Singapore.1 Despite being a relatively young industry, Fintech is already experiencing an expeditious growth. This is partly because governments and financial sectors across Asia Pacific are realising that Fintech solutions are not only addressing the needs of online retail, but also helping widen financial inclusion to the unbanked population of developing countries.2

Without a doubt, one of the essential ingredients to Fintech’s expansion is the availability of talent with skills in blockchain, big data analytics, AI, robotics, cyber security, applications development and e-commerce / service-oriented architecture design. However, the global scarcity of – and high demand for – these skills, has made it around 60% more difficult to attract and retain the professionals who possess them.3 4 This challenge will only increase as the need for these skills continues to grow over the next two years. As a result, organisations have had to introduce new and innovative rewards strategies in order to attract and retain professionals with those required skills.

The financial services sector typically offers some of the most competitive pay and rewards in the global job market, but the smaller Fintech enterprises still keep winning more of the limited talent pool. Some financial organisations have taken the step to merge with Fintech start-ups, instead of competing for both talent and technology. But to sustain these partnerships for the long-term, traditional perspectives must give way to new ways of thinking and doing. Defined targets, KPIs and conventional HR policies often become ‘kryptonite’ for digital talents. Organisations need to take a closer look at the elements of the digital employee culture, especially as they are outshining the value of high pay.

Today’s digital talent expect and are beginning to anticipate that their compensation packages blend monetary and nonmonetary rewards, instead of following traditional pay structures. A competitive salary is essential, but it needs to be paired with a workplace that allows digital talent to expand their minds, acquire new skills and face challenging situations that invite them to g. Willis Towers Watson’s latest study of Chinese Fintech talent in the financial services industry – The Fintech Talent Quotient (FTQ) – featured an enlarged data set of more than 500 enterprises from banking, Fintech, insurance and capital markets. This research measured not only talent management maturity, but the current ability and future potential of financial technology, and insight into best practices. We concluded that Fintech enterprises have the highest comprehensive capability in the Fintech Revolution, as the key development drivers.5 The digital strategy provides an ambitious roadmap for continued growth of Fintech enterprises. About sixty percent of Chinese Fintech companies have changed their organisations model to support digital transformation, specifically creating separate digital jobs, instead of digital responsibilities within existing jobs. And over half of Chinese Fintech enterprises are aware of the future of automation, and have a holistic, integrated workforce strategy to balance work activities between humans and automation. They are more likely to bring their entire organisation along on the journey, creating a truly digital culture and instilling in their employees a deep understanding of the organisation’s digital imperatives.

Innovative culture

Employers need to understand that digital talent are hard-wired for innovation. A curious mind-set requires a wide room for collaboration, imagination, creativity and flexibility – an environment that start-ups have by default. The traditional command-controlled vibe needs to yield to an open workplace that encourages employees to keep exploring and tackling fresh challenges – even in undertakings outside of their usual assignment.

Eighty-three percent of organisations in Asia Pacific now highlight career growth opportunities as a key element for the sustainable engagement of digital talent. Typically, larger and traditional financial organisations have a formal policy, while Fintech start-ups look at their employees individually and offer opportunities on a case-by-case basis. These come in the form of development programmes, seminars, training, career management or succession planning.3 Almost half of high performers in the region cite the lack of such opportunities as their top reason for leaving an employer.4 Continuous learning and growth is crucial to ensuring competitiveness and relevance, especially in this era of rapid technological evolutions.

Seventy-two percent of organisations in Asia Pacific offer challenging assignments as a tool for acquiring key digital talent. A majority of these assignments can be categorised into three groups: client-linked, international, and cross functional. Employees are invited to and highly exposed to multi-department project groups or international projects, which include a wide-range of client type. These experiences provide an opportunity to strengthen, develop and learn skills applicable to the workplace that will make them more agile and adaptable in the digital economy.

Individualised rewards

Compensation plan design for digital talent tends to be very specific and substantial due to their unique skills and high market demand. Sixty-nine percent of Asia Pacific organisations are reportedly paying between the 75th to 100th percentile for critical digital skills.3 Specifically, in China, the compensation of talent in the Big Data function is notably thirty five percent higher than other functions. The same is true for the technology development, where thirty percent higher compensation can been observed.8 Most Fintech start-ups also throw in a number of attractive perquisites, stocks and other incentives. However, as start-ups are small enterprises driven by high-stakes short-term goals, they are likely to have a limited headcount. Even traditional enterprises offer bonus schemes that are tied to organisation performance. But the most successful way of rewarding digital talent is something more personally focused.

Beyond pay, what’s more notable about start-ups is their extremely engaged crew and close-knit operations. This helps their leaders be truly open and transparent – a crucial factor that makes such environments very attractive to digital talent. High-performing critical talent are often less concerned about internal pay equity. They are more conscious of clarity, transparency and purpose as they strive for meaningful applications of their time and strengths. So instead of continuing to rely on traditional cash-based rewards, which is less likely to have a long-lasting impact on digital talent, employers need to look into what motivates their employees in work and in life. Doing so can provide their digital workforce with a healthier sense of career security and direction, as well as shared control over their career growth.6 7

Personalised benefits

Benefit design must keep pace with behavioural changes in the workforce. The mainstreaming of diversity and inclusivity in the social consciousness has made it vital to acknowledge individual differences and personalised needs. In this sense, employers have to move beyond simply insuring risks and reacting to wellness imbalances. It’s time to stop depending on uniform policies – yes, they are convenient from a management perspective, but are ultimately ineffective for employee well-being.

Employers usually overestimate an employee’s understanding of their benefits. Around seventy percent of employers report that their employees have a very good understanding of their benefits package. However, over half of Asia Pacific employees say that their existing benefits do not address their actual wellness concerns8. Apart from biological differences, our needs also change according to social factors such as life stage, health and domestic priorities. For example, the most urgent financial concerns of a fresh graduate who is single, will be vastly different from that of an experienced worker who is married and has school-age children. Employers are looking to incorporate more choice and flexibility into their benefit packages to meet the diverse needs of the workforce. Alongside the greater priority employees are placing on managing their finances, we see new technology is gaining traction with employees due to a greater use of online apps and tools. Whilst this is not widespread today, there is a growing interest in using digital approaches to nudge and engage employees around benefits.

Benefits need to be about care and support because, at the end of the day, employees are human beings and not just a headcount. Employers can leverage the principles of segmentation and flexibility in designing and optimising benefits. This will help to better understand and cater for the unique profiles that exist within all organisations. An ounce of creativity can also bring about innovative benefit options that will achieve wellness in every sense of the word.


Sources:
1 Global Fintech investment has almost doubled since 2014
2 Digital finance is key to increasing financial inclusion in Asia Pacific
3 2017 Willis Towers Watson IT Skills Pulse Survey Report - Asia Pacific
4 2016 Willis Towers Watson Global Talent Management & Rewards and Global Workforce Studies
5 2017/2018 What’s your score? An innovative approach to assessing your talent capabilities – The Fintech Talent Quotient (FTQ)
6 HR will play a crucial role in the future of work
7 Is it time to deliver a personalised rewards experience for your employees?
8 2017/2018 Willis Towers Watson Asia Pacific Benefit Trends Survey

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