Purchasing power: why salary is once again the top priority for executives – Bruno Fadda’s contribution to an article in Le Figaro

These employees now rank salary as their top priority, ahead of remote working and work-life balance… Is this a long-term trend, or more of a short-term reaction to the current economic climate?

Who said that work-life balance was executives’ number-one priority? Or that having the option to work remotely two or even three days a week was what mattered most?

Things are beginning to change, with pay once again moving very clearly back to the forefront. A study by the Viavoice Institute, carried out on behalf of the CGT’s General Union of Executives, found that 70% of executives now see remuneration as the most important factor.

At the same time, a CSA survey for Factorial – a company providing business management solutions – sought to determine what constitutes “quality work”. For 56% of employees, salary is the most important criterion. This does not mean that working patterns or relationships between colleagues are being overlooked, but they now rank behind pay.

Inflation

“The situation is straightforward: against a challenging economic backdrop, executives feel they have lost purchasing power after several years of inflation,” explains Bruno Fadda, Managing Director of Grant Alexander Executive Search. “Companies, meanwhile, remain cautious about their payroll costs and recruitment. It is therefore hardly surprising that remuneration has once again moved to the top of executives’ priorities.”

He points out that when an executive is considering a career move, the expected salary increase is often an important factor in the decision. And when an offer comes in significantly below a candidate’s expectations, it is very often turned down.

“To attract candidates, companies therefore need to make use of the full range of remuneration levers beyond fixed salary — bonuses, profit-sharing schemes, long-term incentives (LTI), the overall package, benefits in kind, and so on — while also making their remuneration policies clearer. This is, moreover, a development that greater pay transparency is likely to accelerate.”

“What we are seeing above all is a growing demand for consistency between the level of responsibility entrusted to executives, the contribution expected of them in terms of value creation, and the recognition they receive,” concludes Bruno Fadda. “The fact that one executive in two feels insufficiently recognised also reflects, in my view, this need for greater consistency.”

Read the full article on Le Figaro’s website (only in French)