Working in Remuneration
APPNZ interviewed Melissa Russek, Remuneration Lead at Auckland District Health Board.
Melissa, can you tell us about your career path into remuneration?
My career path into remuneration is not typical. I started in HR as an HR Analyst after 7 years PQE in hospitality and customer service I was then hired ‘on potential’ from a Bank Teller position after I’d applied internally for an HR Administrator role.
I wasn’t successful in getting the HR Administrator role, but I was asked to undertake a specific aptitude test for the vacant HR Analyst position and I scored higher than their external candidates and was much cheaper, so they offered to train me as an HR Analyst.
At that time, I had no experience with Excel, but did have a Business degree with a double major in HR and Travel/Tourism. Over time, I grew the HR Analyst role to encompass more remuneration analysis and started making recommendations to the GM HR.
I was trained on job evaluation and became responsible for the annual salary review. After two years in the HR Analyst role, the position was split into Remuneration Consultant and HR Reporting Analyst. I chose the Remuneration Consultant position. I’ve now worked in rem for 16 years, including 9 years as a Consultant (for dsd and then EY).
In my experience, most rem people have fallen into this specialisation by accident. Either because they were an HR generalist who had an aptitude for numbers, or because they were an Analyst who happened across an HR vacancy.
Remuneration is not taught as an HR specialisation in tertiary institutions, so organisations often “grow their own”.
2. How do you summarise what a role in remuneration involves?
Because you are working with numbers, there is a misconception that rem is a science, when in fact it’s an art. There is often no ‘right’ answer when it comes to how to pay individual employees, but rather a number of considerations that form the ‘best’ (or robust, or fair, or consistent, or affordable, or pragmatic etc.) answer. Most organisations have market linked rem policies in place, but the real value is in interpreting those policies into ‘real life’ situations.
The rem function is about governance and the development of frameworks that facilitate good decision making regarding what is typically one of the largest costs to an organisation.
At an operational level, this includes:
At a strategic level, this encompasses:
3. What do you enjoy most about your role?
I really enjoy the puzzle solving element of my role. I like peeling back the layers or dissecting an issue, identifying the root cause, and then building back up a framework or solution that best fits the employee group or wider organisation.
Remuneration encompasses the entire organisation, so the decisions/recommendations you make have a wide reach. Building credibility and trust is very rewarding.
There are opportunities to impact the success of an organisation:
4. What are the key skills that you would need to work in remuneration?
The key skills that I typically hire for (in order of importance) are:
1. Critical reasoning
2. Numeracy (and statistical) skills
3. Attention to detail
4. Excel skills
5. Systems and process focus
6. Report writing skills
Employees that aren’t able to question and interrogate data/information don’t do well in a rem role.
This is illustrated in the development of pay structures, incentive schemes and benefit packages. Just because the market information says a specific thing, doesn’t mean that the literal application is the right answer for your organisation.
For a period at Ernst & Young, we stopped looking at Business Management graduates and starting recruiting those with an Organisational Psychology degree, as they seemed more likely to have critical reasoning skills.
Attention to detail is imperative. When you’re modelling the cost impact of a salary increase or a new benefit, being able to identify data anomalies, and checking formulae is very important. If you present recommendations where data is incorrect, you lose credibility and trust.
Excel skills can be taught, however having them already is a real advantage. Excel skills allow you to test hypotheses and do your own modelling without relying on the HR reporting team. Entry level roles into rem would definitely encompass a high volume of Excel work. In my experience, those candidates with Excel skills are more likely to question data and information than those that you have to train.
HR practices and legislation can be taught, however, this may be an advantage for an internal candidate – particularly when coupled with institutional knowledge.
Reporting writing skills are the difference between whether you stay a Remuneration/HR Analyst, or grow into a Consultant or Manager.
You need to be able to tell the story of why you are interpreting information a particular way and articulate your recommendations.
5. How would you recommend HR or payroll people who are interested get involved in remuneration?
1. Understand the data used for rem decisions
• Payroll drive the data used for rem analysis and reporting
• Highlight anomalies and integrity issues to your rem person
• Clarify payroll rules and their impact on reporting. Sometimes rem people don’t know the ‘hooks’ in the reports they are requesting.
2. Collaborate on legislation changes and projects and be a trusted advisor
• Are policy updates required as a result of legislation changes? E.g. Who was responsible for communicating minimum wage increases – payroll or rem?
• Share your interpretation of legislation (e.g. KiwiSaver employer contributions, buying out 4th week of annual leave)
• Collaborate with the rem team about the annual salary review process and timing
• Payroll system capability should be understood before policy changes are recommended. E.g. If the rem team is recommending a new allowance, do they understand the tax implications?
3. Offer to help
• Rem tasks are often undertaken by HR Managers or single rem specialists
• Talk to your manager if you want to become more involved in rem
• Start with the annual salary review or rem survey submissions
• Pull data from the payroll system, cleanse data, data manipulation and modelling
• Peer review/ checking/ data audit
• Document processes
• Get involved in implementation of rem systems
Thank you to Melissa for a fascinating insight into working in remuneration.
: People Matter