HR professionals often fail to appreciate that for senior executives there is no such thing as a work life balance, only a balanced or unbalanced life. It is no real surprise that highly successful people who expend enormous time and energy in top roles at organisations, often do not have much time or inclination to sort out a range of personal matters when they eventually get home. It is no surprise either, that such people are more than willing to pay for a range of concierge services to make their lives easier, from booking their travel and restaurants to cutting their lawns and valeting their cars. These personal services should – but usually don’t – include a proper oversight of their financial affairs. Good financial planning services are available but very few executives take advantage of them.
As with any benefit it is HR’s responsibility to make to sure they have easy access to this, but this responsibility is more than just giving them the name of a chosen Financial Adviser and expecting them to book an appointment.
The current ‘Shareholder Spring’, brings into sharp focus the pressures the Reward specialists and Remuneration Committees of large companies face when setting their senior executive remuneration packages. The escalation of executive remuneration over and above mainstream trends in pay and inflation over the last few years has not gone unnoticed, both within the HR reward arena and the wider public media.
It is unlikely that successful commercial organisations will ever find the Holy Grail of providing remuneration that is both fully satisfactory to its executives and also fully acceptable to shareholders, employees and the public. However, an effective strategy to tackle this problem is to proactively provide appropriate support services to the senior team to help ensure that their personal financial objectives are clearly identified and can be met by continuing to work for your organisation.
For many HR professionals, this suggestion may prove to be somewhat surprising, given that HR has traditionally steered clear of getting involved in the personal finances of their senior executives. But there is no need for this reticence: any personal advice will always be strictly confidential in exactly the same way as the results of executive health screening or life insurance underwriting.
It is surprising how often successful senior executives turn out to have rather chaotic personal finances. With proper professional guidance and advice, these can be quickly and efficiently organised and so provide peace of mind and a significantly enhanced sense of financial wellbeing, at a very minimal cost, in relation to the executive’s overall remuneration. The idea of a personal ‘Business Plan’ is not that difficult to understand if presented in the right way: after all, senior executives live and breathe business plans on a daily basis whilst at work.
And a good financial plan is equally important when an executive’s time is up. It is a reasonably common occurrence at most large companies that from time to time a senior executive or director reaches a point when it is clear to the company that their future lies elsewhere, even if the individual concerned has not yet realised this for him or herself. At such times, the provision of high quality financial planning advice can significantly smooth the process for all concerned.
It often enables the executive to leave willingly, safe in the knowledge that they have sufficient financial resources to be able to take a reduced package or part time role elsewhere thus enhancing their overall quality of life. The reputational risk to the company is therefore greatly reduced.
In conclusion, a proactive HR input to provide a meaningful and cost effective financial planning benefit to senior executives can reap real rewards for the company and deliver financial wellbeing to a group which may not hitherto have had much engagement with mainstream benefits or flex packages.
Why not join theHRDIRECTOR for our complimentary roundtable debate entitled ‘Reward strategy and remuneration management Roundtable’ kindly sponsored by Towry, where we will be discussing this topic in more detail, click here for more details