The 2018 McLagan Perspectives Report: An In-Depth Exploration of Current and Future Trends in Financial Services

We are in an age of major global transformation for financial services. As technology continues to shape a new industry landscape, firms are forced to rapidly adapt to trends in the current market, including longstanding talent and rewards strategies to stay competitive in the race for tech-enabled talent. This is a challenge that financial services firms must face head on, while at the same time contending with political and social unrest, economic fluctuation, and strong regulatory standards.

Are You Creating a High Performance Culture at Your Firm?

Think twice before scrapping performance management at your firm. Rather, ensure that it delivers on its promise. Employees are attracted to firms that recognize their contributions and managers need to be held accountable for managing performance for their teams.

Executive Compensation: Hidden Questions in Bank Peer Group Selection

Most banks use peer groups to evaluate their executive compensation programs. However, since every peer group process is unique, creating hard and fast rules is not usually the best approach for firms to take. We have seven questions for consideration that may change the way you think about your compensation peer group altogether.

The Spotlight: Rob Northway, Partner, Head of Global Consumer Banking

Rob Northway, a Partner at McLagan, is head of the global consumer banking practice. Rob specializes in the design of compensation programs, guiding clients through the job architecture and leveling process, and supporting clients in aligning their human capital strategies with business objectives.

A Case Study in Leveraging Compensation Market Data: Re-Defining Your HR Function

The HR function plays a critical role in the future of financial services firms. HR helps ensure that organizations can effectively and efficiently attract, retain, develop, deploy, motivate, and compensate the talent that will help them reach their goals. We’re guessing that the average reader of this article is an HR or compensation professional, so they will already know and appreciate the breadth of these responsibilities. In order to fully achieve this vital role at time when there is a dramatic increase in the quantity of data available, HR needs access to data and to hire or develop individuals who can turn that data into powerful analytics to help answer business questions and inform talent strategies.

Aviation Finance: Navigating Executive Pay Programs

Second only to the weather, travel woes are the friendliest form of small-talk. Unexpected delays, airport congestion, and shrinking seat size are universally relatable for air travelers. However, it may come as a surprise that many aircraft are leased and not owned by the operating airline. In fact, a small group of organizations purchase, maintain, and lease aircraft to airlines. These aviation finance firms provide an interesting case study of compensation programs, reflecting the realities and forces that shape a specialty finance sector. The following article discusses the unique demands placed on executive management teams in aviation finance, why it is challenging to recruit and retain these individuals, and considerations for setting an effective pay strategy.

Winning the Talent War in China

According to our recent China McLagan Talent Pulse Study, talent management tops the agenda for an overwhelming majority of the 58 participating firms, ahead of growth, innovation, and customer service. We’ve outlined some of the innovative strategies that firms can adopt to stay ahead and win the best talent in China.

The Spotlight: Ephraim Edelman, Partner, McLagan Reward Data Solutions

Ephraim Edelman leads the reward data business for McLagan, including strategic initiatives of product development, platform roadmap, machine learning, and governance, as well as new data and analytics client solutions.

Five Considerations When Choosing the Source of your Compensation Market Data

Independent compensation market data provides a source for examining pay levels and pay mix to evaluate the competitiveness of firm compensation packages. As the trend of prohibiting firms from asking candidates for their salary history continues to rise, using trusted third party data to ensure competitive pay programs is critically important.

Are You Hiring the Best Talent for Your Firm?

Times have changed for financial services. Firms are faced with disruptive technologies, digitization, new market entrants, a transforming workforce and fierce competition for talent. Finding the right talent off the bat is therefore more important than ever before. Measuring personality through the use of assessments can help pinpoint who will be the best fit for the job, your company culture, and the future success of your firm.

Australian Regulators “BEAR” Down on Accountability

The Banking Executive Accountability Regime (BEAR) is scheduled to go live in Australia on July 1, 2018. This marks the Australian government’s latest response to improving accountability in the financial services industry. The new regulation aims to raise the bar for risk management and corporate governance standards and outline consequences for both institutions and responsible individuals who breach the required standards of the regulation.

The Spotlight: Kate Cramer, Partner, BCM Performance

Kate Cramer is part of the BCM Performance practice. In her role, Kate delivers market share
and strategic advice to investment banking clients across the globe.

Banking Standards Board: Doing Well While Also Doing Good

In the wake of the 2008 financial crisis, the UK financial services industry shifted its focus to restoring trust and shaping a more resilient and consumer-oriented industry. Considered the worst economic disaster since the Great Depression, the crisis suggested that banks had failed to appropriately serve customers, as well as the public good. Although the UK banking sector holds great importance to the overall economy and society, regaining trust in the industry is an ongoing struggle that requires sustained improvements to leadership and culture.

The Spotlight: Martin McGuigan, Partner, Head of Middle East

Martin McGuigan partners with firms on their rewards strategies in the Gulf Corporation Council and other regional markets, such as Egypt, Lebanon, Jordan, and Pakistan.

What’s Trending in Property-Casualty Insurance?

The changes occurring within financial services are indisputable. Technology disruption is real and it’s happening all around us, influencing workforce strategies, capabilities, operations, expense management, as well as employee and customer expectations and behaviors. This is especially true in the property-casualty insurance industry, where the focus lies on people and achieving an optimal customer experience.

What You Need to Know About Brazil’s New Labor Laws

While companies continue to wait for answers on how the courts will rule on any grey areas surrounding Brazil’s new labor laws, it is important to understand their implications on local human resources departments. Most of all, the new labor laws provide companies with more flexibility for hiring and remunerating their employees.

A Backward Glance and Forward Look at Board of Director Compensation

Across the banking industry, director compensation remains subject to regulatory and shareholder scrutiny. While increases in director pay have continued in recent years, the mix of pay has also continued to shift.

The Newly Revised U.S. Tax Code Will Influence Executive and Employee Pay, but How Much?

In addition to the changes to corporate and personal income tax levels, the new tax bill is likely to influence incentive compensation for executives and the broader employee population.

The Spotlight: Shelley Eisenhandler, Partner, Asset Management

Shelley Eisenhandler, a Partner in the Asset Management practice, manages McLagan’s alternative asset management business, including over 200 hedge funds, private equity firms, and real estate investment managers.

Tax Reform Impact for Tax-Exempt Organizations

The Tax Cuts and Job Act was signed into law on Friday, December 22nd. The following outlines the implications for "excessive pay" in tax-exempt organizations, effective for employer tax years beginning after 12/31/2017. 

Securities Services on Blockchain: The Disruption of the Custodian Banks?

In response to the many questions we received at our webinar discussing a recent white paper, Securities Services on Blockchain: A Value Analysis for Custodian Banks, we asked Alex Powell, co-author of the paper, to share his thoughts in response to the themes surrounding this important industry topic. We’ve grouped the Q&A into the following themes themes: Use Cases and Opportunities, Obstacles, Incentives, Standards Needed, Regulatory Responses, Cyber-security, Potential Consequences, and The Future.

Your Pay Equity Questions Answered

According to the Economic Policy Institute, men significantly out-earn women across all pay scales. A typical woman working full time is paid 80 cents for every dollar made by a full-time, working man, and can lose more than $530,000 over the course of her lifetime because of gender wage gaps. The average college-educated woman loses even more—nearly $800,000, as reported by the Institution for Women’s Policy Research.

The Spotlight: Tzeitel Fernandes, Partner, APAC Banking and Capital Markets

Tzeitel Fernandes leads the Banking and Capital Markets practice for McLagan in the Asia Pacific (APAC) and is also the Managing Director for the Hong Kong office, representing Talent, Rewards & Performance.

Infographic: Elevate People Performance in Financial Services

It's no secret that times have changed for the financial services industry. When times were good, soaring revenue and profits covered up human capital challenges and issues lurking beneath the surface. Today, firms are emerging from the human capital bubble and need to position themselves to select, engage, and develop their most critical resource - people. In our latest infographic, get key insights and actionable tips your firm needs to rise above.

The Spotlight: Sean Carney, Partner, European Banks

Sean Carney leads McLagan’s European Banks reward team. His group is responsible for relationships, benchmarking, and consulting services across all major investment, corporate, and retail banking clients with a presence in Europe.

Bridging the Gap: The Rising Fight for Pay Equity in Financial Services

Did you know that when the Equal Pay Act passed in 1963, women were making 59 cents to every dollar earned by men? Today, nearly 55 years later, a typical, full-time female employee is paid 80 cents to every dollar made by her male counterpart, according to the Economic Policy Institute.

Maternity Matters: What the Amended Maternity Benefit Act Means for Companies in India

Despite marginal improvements over the past few years, the gender ratio at the workplace in India remains heavily skewed towards men. The proportion of women directors in National Stock Exchange (NSE) listed companies is about 13.7%. According to a survey report by the Confederation of Indian Industry’s (CII) Indian Women's Network (IWN), 37% of women opt out of their jobs mid-career due to maternity or childcare issues. The pressure of balancing responsibilities at home with a professional career has resulted in such slightly discouraging statistics.

One Year After the Retail Banking Scandal: Are Banks in the GCC Region at Risk, Too?

The retail banking scandal has exposed the perilous link between the actions of the sales workforce and corporate culture, as well as the laissez-faire attitude towards mis-selling that led to those actions. Are banks across the GCC region at risk, too? 

The Spotlight: Jeff Rieder, Partner, Head of Ward Group

Since 2005, Jeff Rieder has served as Head of Ward Group, a part of Aon focused on insurance performance and rewards practices. He has significant experience in the industry with expertise in the property-casualty and life, health, and annuity segments.

Banking Observations on the CEO Pay Ratio and New SEC Guidance

The SEC Corporation Finance Staff, on September 21, 2017, issued three forms of guidance on the CEO Pay Ratio Rule: an interpretive release, a press release, and new and revised C&DIs.   

 

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