The Equipment Leasing & Finance Association presented the results of the 2022 Equipment Leasing and Finance Compensation Survey during its recent webinar, “Compensation and Workforce Trends in Financial Services.” Bill Choi, vice president of research and industry services at the ELFA, moderated the webinar and welcomed Steven Hurd, a partner at Aon Human Capital Solutions, and Dave Rosenthal, a senior consultant at Aon Human Capital Solutions, for the panel presentation of survey data and market forces impacting equipment finance industry compensation.
The event examined compensation issues and challenges, as well as survey responses from more than 80 equipment finance companies representing a cross section of the equipment finance sector, including independent, bank and captive equipment finance companies.
The following are among the webinar highlights:
- Biggest challenges for HR leaders. The four key areas where HR leaders are focusing in 2022 are talent and staffing, return to office, managing compensation expectations and continuous improvement. Recruitment has been strong, with financial services firms hiring at all levels of the organization this year. Employee motivation and engagement, particularly getting new or junior employees up to speed and building collaboration and comradery continue to be issues as work from home policies are still front of mind. Diversity and inclusion are also important across all organizations. HR departments are working to ensure they are sized and structured properly.
- Higher compensation at all levels. Total compensation increased notably, especially at senior levels. Top producers received 10-20% total compensation increases in 2021, levels which haven’t been seen in some time. Both median salary increases of 3% and 6% salary increases at the 75th percentile are also quite notable for the equipment finance industry, which is heavily focused on a commission-based approach. Total compensation generally increased by 5-10% year-over-year.
- Infrastructure total compensation reaches 10-year high. Increases of 8-10% across technology and control functions in 2021 were the highest increases in a decade. Infrastructure salary increases in 2022 average 6-8% across functions—about 75-80% of total compensation spend—and compensation will continue higher despite flat or downward pressure on the incentive pool.
- Outlook for year end. 2022 has been an aggressive year of hiring new employees into organizations, with headcount up mid to high single digits, higher expenses to hire new employees, higher salaries and pressure on incentives after a strong 2021. With two openings for every job seeker, pay across financial services firms is under pressure and salary spends are high for the second year in a row.
- Guidance for the 2022 pay year. The panel also provided insights to help HR professionals navigate the compensation and workforce challenges they face.
- Internal equity and pay disparity challenges exist in organizations. Many firms are conducting pay equity audits to understand where there are differences and developing a plan to correct them.
- Equipment finance firms continue to hire and there’s always a demand for the best talent. Retaining your existing talent through development, engagement and culture should be a priority.
- Pay transparency regulations for salary ranges for new organizational roles exist in some states like New York. Striking the right balance between attracting new hires and not disrupting existing employees presses the need for more structure, discipline and rigor to your compensation program.
- Assess and articulate your organization’s compensation philosophy.
- Managing expectations is important going into year end and 2023, so communicate well and often.