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New Work, New Pay, New Normal

IESF proudly presents an expert article published in
PERSONALintern – an online newsletter for the HR Management in the DACH region – written by Stephan Löw, Managing Partner at Topos Personalberatung and exclusive IESF partner for Germany. In this article Stephan explains the HR term New Pay and connects it to the New Way of Work since COVID-19. Just as, due to Corona, meticulous working time records suddenly gave way to generous regulations and the long-delayed introduction of communication tools suddenly succeeded within a few days, companies should also show courage when it comes to salaries and: just do it. You want to know why? Enjoy this read and find out.

The Corona crisis is acting as an accelerator in many areas. This is especially true for the trend towards mobile working, which has radically increased over the last twelve months. Many companies and managers who were previously rather sceptical about the topics of home office and remote work have changed their minds and found that much of their fears have not been confirmed. Employees are suddenly working more flexibly, results-oriented and often with at least as much time commitment as before, just distributed differently throughout the day. Not everything is perfect yet, but the blockades have been loosened. And the whole nation seems surprised and fascinated by its own ability to change. If current surveys are to be believed, this is not a snapshot, but the new normal.

New work – old salary

But even though new work and agile working are on everyone’s lips, remuneration systems and the way salaries are handled remain untouched. Hierarchical structures in the working world are loosening massively, salary routines seem cemented. Why is that? When it comes to the topic of money, the joy of communication quickly comes to an end. People still don’t like to talk about money, but more and more often there is a demand for more transparency in salary issues. Who gets how much for what work? And why?

Transparency in this context means above all the de-tabooing of remuneration. This still seems to be a problem for many employees. Those who think they earn too little fear they have been ripped off, those who get more than others perhaps suspect they don’t deserve it after all. But what does “deserve” mean? Is performance the only yardstick? And how is performance measured? Is pure office presence worthy of reward or is it the share in the company’s success? And how should this be broken down? Admittedly, there is no magic formula for fair salary models, but that does not justify leaving inadequate models untouched.

Often, companies only begin to tackle sensitive issues such as remuneration routines when the discontent in the company is already audible. Why wait so long? Times of upheaval, when routines that have provided structure up to now are abandoned and fundamental things are questioned, also offer the opportunity to throw off ballast and establish a new corporate culture.

It’s time for New Pay

New Pay is a term that we have come across more and more frequently in this context in recent years. As a natural companion of New Work, New Pay has found its way into the language of HR managers and reflects the principles of New Work. Central values are, for example, collaboration, working at eye level, knowledge sharing, personal responsibility, participation, transparency, flexibility and fairness.

New Pay does not carry a new universal salary model in its baggage, but rather aims at thought-provoking impulses and transformation processes. It is about creating individual remuneration systems that correspond to the respective structure and form of cooperation in an organization – all with the aim of increasing employee satisfaction, without which the success of a company is inconceivable. There is no blueprint for New Pay; rather, suitable solutions have to be developed and implemented in each company and each sector. The larger a company is, the more difficult this is; medium-sized companies have a better chance here.

Digital natives have other ideas

Technological progress demands employees with top education and digital skills – but these are hard to find, not least due to demographic change, pushing companies into the position of the applicant. Companies must therefore ask themselves the question: How do we manage not only to recruit top professionals, but also to retain them in the long term? There is no patent remedy for this, but a central question is what expectations do these employees have of work processes and leadership and where do they place themselves in the field of tension between free time and salary? The values and wishes of many employees regarding their workplace have changed considerably. They expect a high degree of flexibility from employers – for example in the form of greater freedom of choice between money and free time. Especially for the wooed digital natives, it is not only the salary that counts, they are looking for “purpose”, for a job that creates meaning and gives them room for their own projects. If companies can’t offer that, they go elsewhere. They may be outnumbered, but their voice carries weight.

Why should companies introduce new pay structures?

Considerations on New Pay are of immense importance for medium-sized companies. Similar to the topic of New Work, it can be assumed that companies that rethink their remuneration systems and make both fair and transparent offers will be more successful in recruiting new managers and employees, which will be a decisive competitive advantage against the background of empty labour markets. This, in turn, will help them to future-proof and successfully set up their business models and thus better survive in the market and realize growth in the long term.

Just as, due to Corona, meticulous working time records suddenly gave way to generous regulations and the long-delayed introduction of communication tools suddenly succeeded within a few days, companies should also show courage when it comes to salaries and: just do it.

About TOPOS:

TOPOS Personalberatung is the German partner of IESF and one of the leading medium-sized headhunting companies in Germany, advising its clients both nationally and internationally, particularly in the areas of executive search and interim management. The company is represented in Hamburg, Bonn, Frankfurt, Hanover, Munich, Nuremberg and Stuttgart.

Since 2007, Stephan Löw (51) has been Managing Partner of TOPOS Personalberatung in Hamburg. With his career as an officer in the German Air Force and his business administration studies he laid the foundation for his professional career, which he continued as Manager for Sales & Marketing in an international industrial company.

At TOPOS, Stephan Löw is mainly responsible for the Industry Practice Group and international mandates in headhunting.


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