The days of top executives being lured to new positions by outrageous pay packages are drawing to a close - apart from the occasional exception, a leading SA headhunter says.

 

Debbie Goodman-Bhyat, Managing Director of Jack Hammer Executive Headhunters, says more structured HR practices and a strong focus on good corporate governance have led to more realistic package offers.

 

“Looking over a period of two decades, many organisations are now structuring packages to comply with a huge amount of governance and line with salary bands for the role, under the watchful eye of remuneration committees. Instances of fantastical amounts of money being thrown in the direction of a prospective candidate are now the rare exception rather than the frequent norm,” she says.

 

Goodman-Bhyat says when present day packages are determined, many more policies and procedures need to be followed compared to the past. These practices were strategically determined to ensure companies no longer over-pay or offer bizarrely off-market packages to individuals – no matter how experienced and coveted.

 

“For a good decade or so, SA’s cream of the crop were offered what was fondly referred to as ‘stupid offers’ – because you’d be stupid to turn them down! But now the premium offers for candidates are considerably more modest than they were 15 years ago. These days, the focus has shifted to ensure that offers to candidates place a strong emphasis on longevity and tenure, linked to their contribution to the business, and often in the form of long-term incentives.

 

“While these kinds of packages remain comparatively lucrative, the actual cost to company increase will be more modest, and seldom much higher than 25% - 30%.”

 

Goodman-Bhyat says the implication of this new top talent salaries-playing field, is twofold:

“Headhunted candidates must realise that although their potential contribution may be significant, and even recognised as so, they should not expect a ‘stupid offer’ that’s impossible to turn down. The extraordinary offer has become a myth, it’s just not what companies do anymore these days.

 

“Rather, these candidates should focus on the long-term and holistic benefits that can be expected from taking up a new position, with a much larger emphasis on role and resultant job satisfaction – particularly where it is linked to performance. Yes, it is fair to have an expectation of some premium, but focus on the opportunity itself. The money must be good, but the financial offer is seldom going to shoot the lights out these days.”

 

On the other hand, and not a little paradoxically, this new status quo gives an opportunity to companies to really draw in the talent they want if they are willing to be a little more generous, says Goodman-Bhyat.

 

“Being in the position to offer a higher premium will enable a company to be more competitive in the face of more modest offers,” she says.

 

“Over and above that, companies should offer long-term incentives, to add additional value to the offer but also to encourage tenure and contribution. Not all companies can do this, but certainly where they can afford to be more generous, they can make themselves a lot more attractive to coveted talent.”