UK bosses say top execs’ pay should be linked to business performance

Two thirds of bosses say that top executives’ pay should be related more closely to overall business performance, according to the latest JobsOutlook survey from the Recruitment and Employment Confederation (REC). Fewer than one in six felt there was no need for such a change in how pay for senior management was calculated.

Commenting on the latest findings, the REC’s Director of Research Roger Tweedy, says:

“The clear message we are getting from employers we have spoken to is that top executives’ pay needs to be more aligned to their performance.”

The JobsOutlook survey provides monthly insight into key issues facing employers and their short and medium term hiring intentions. While concerns over executive pay and performance were clear, the survey indicates a more optimistic mood amongst employers over their hiring intentions.

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This month’s report shows a slight increase in employer confidence to a level stronger than at any point in 2011. This finding is mirrored in the specific feedback about hiring intentions, which shows that slightly more employers than last month plan to increase both permanent and agency staff numbers over the next quarter, whilst fewer plan to reduce their headcounts over the next year.

The REC’s JobsOutlook survey of employers reports that:

• 64 percent said they planned to increase the number of permanent employees over the next three months (compared to 63 percent last month)

• 59 percent expect to increase permanent hires over the next 4-12 month period (compared to 61 percent last month)

• 32 percent plan to increase agency worker numbers in the next quarter (up one point from last month) with 19 percent saying they intend to decrease their use of agency workers (down from 22 percent last month)

• 30 percent say they will increase agency workers over the next 4-12 month period (compared to 28 percent last month) with 17 percent saying they will decrease their use of agency workers (down from 19 percent last month)

• 65 percent said that executive pay should be related more closely to overall business performance.

Roger Tweedy concludes: “The data on the bigger picture shows that employer confidence remains relatively static and quite fragile. This is contributing to the stop-start nature of the recovery where a stronger month can then be followed by a slightly weaker one. However, many businesses understand that recruiting good people is the most effective way to grow in a recession.”