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Pay remains the biggest issue facing global HR directors in the financial sector

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Pay is the biggest issue for global HR directors in the financial sector – coming higher on their priority lists than talent management and employee engagement.

A Towers Watson poll, which involved 130 senior HR professionals (from over 60 of the largest global banking and financial services organisations in the world) also indicated over a third viewed pay issues as the most important HR priority, followed by talent acquisition (23%) and the redesign of the employee value proposition or "deal" (20%).

In addition, two thirds of the group believe that public officer executive base salary levels have not yet stabilised, while there was general agreement that base salary levels for lower-level employees have stabilised.

Over 40% of senior HR professionals from the financial services industry identified risk adjustments to financials or incentive pools as the most expected shift in pay policies in the next 12 months.

The shift represents a stronger focus on pay issues rather than other changes such as linkage of deferred vehicles to business unit performance (16%) or longer vesting periods (15%).

The poll also indicated a low level of interest by this group in the introduction of new deferral vehicles such as "CoCos" (7%). Mark Shelton, global co-lead of Towers Watson's talent & rewards financial services practice, said: "Global financial institutions face many issues that connect human capital challenges across pay, performance, risk, regulation, culture and governance. Given the dramatic evolution of pay policies and structures, sufficient linkage to other human capital priorities such as talent management, risk culture and engagement are essential."

The poll was conducted at a Towers Watson conference in London last week.