C&B Leaders Gather in Singapore at BHP Billiton

Hosted by: BHP Billiton

The Chapman Consulting Group co-hosted an excellent C&B Leaders gathering with BHP Billiton in Singapore this afternoon. The session was well attended and we were joined by a group of motivated and experienced specialists from a wide range of industry sectors, which led to some interesting and contrasting views on the hot topics currently affecting this particular HR community.

The first discussion focused on the use of long-term incentive plans (LTIs) and a case study and short presentation was given by a Rewards Partner from the financial services sector. Essentially they asked the group whether LTIs are helping retain top talent in Asia or is cash the main consideration? The general consensus is that they are not. The fact that Short term incentives (STIs) are generally higher in Asian conglomerates compared to Western centric organisations reiterates a short-termist approach from executives. Indeed, a recent survey concluded 87% believed LTIs do not motivate them.

In short, cash is still the key driver and in reality, LTIs still struggle to improve both performance and retention. Shareholder pressure is resulting in challenging performance measures being introduced linked to LTIs which executives will then discount. To further incentivise, organisations are granting more LTIs and the net result is that these executives will still leave but they will be brought out a higher cost. Outside of banking, some companies have actually removed LTIs completely. However, this was certainly not the general consensus amongst the group. In fact, some have seen much greater buy-in and success recently and the key reason for this was ‘communication’.

It was noted that the explanation of how packages were constructed, and for what reason and benefit, could make a significant difference to how they were understood, received and ultimately how this drives motivation, performance and retention. Methods of communicating this varied from intranet online games to open forums and to sharing this information in reward statements, but the message, everyone agreed, should be the same; it’s not all about ‘locking in’ people so they can’t leave, but more that they are being invested in, that the business views them positively, values them and that they have a secure long term future with the company and will be rewarded accordingly.

Another key topic of note from the session was around localisation strategies and practices for expat packages across Asia. As always, this produced a great deal of discussion and opinion as the on-going challenge exists to ensure key international talent is retained, whilst maintaining equality across the local workforce. Of course what happens depends on the location of the person; i.e. in a more developed market, the expat may be weened off their allowances in stages or provided with a lump sum at the end of the contract to help soften the blow as they move onto local terms. In developing or more ’emerging markets’ localisation would be much tougher, and many concurred that it’s simply not possible in the current climate. There is certainly no universal solution as expectations, levels and locations vary so much and there is still a great deal of tailoring on a case by case basis. However, this is changing in some sectors and is often driven by the appetite of an employee to return ‘home’ where level of the opportunity and the macro economic conditions are weighed against the financial considerations.

As always, the conversation could have run and run; but it was a fantastic session to round off the year and we look forward to hosting further events in 2013.


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