5Q: Ofelia Isabel, Towers Watson compensation expert

Ofelia Isabel might've used studying at the University of Waterloo as an excuse to get away from home for a while, but getting a degree in actuarial science helped lay the ground for a two-decade long career.
 
Now as the Canadian division leader for rewards, talent and communication at professional services firm Towers Watson, Isabel advises blue-chip companies on hiring, pensions and benefits.
 
But finding the perfect compensation sweet spot can be tough, says Isabel. Money is a key motivator, but employees are also placing greater desire on the need to have stability, good bosses, purpose in work and flexibility to ensure personal well-being.
 
Where are salaries going in 2014?

Employers are telling us they're projected to provide 2.8 per cent increases for 2014. It does vary a bit by industry so energy, retail, insurance are all planning slightly higher increases; health and banking slightly lower increases.
 
What are the smart, creative companies doing?
 
They're really realizing how important the role of the manager is. On the flip side, employees should really own their careers. Be thinking about what you want to do, what you’re good at, and what value you bring to your organization. Be honest with yourself first – know what you’re good at and what you’re willing to commit to. Then have an open and honest discussion with your manager, ask your manager to help you put together a plan that will help you meet your goals.
 
What are the big mistakes every company makes?
 
A friend of mine worked for a large institution and she lost her job for downsizing purposes. Four weeks later, another division at the same company hired her on contract for two years to do a different role. Why you had to give somebody an expensive package only to rehire them on. And you weren't able to talk to each other?
 
Bigger-picture, where is compensation headed?
 
We used to look at things in a very siloed fashion, where you would have one group of people figuring out the pay, compensation. Somebody else doing pensions and benefits. A completely different department looking after learning and development and manager effectiveness. I think the biggest change I'm seeing in the marketplace is that organizations are more and more looking at the entire deal.
 
How do you see the effects of that?
 
The research is pretty cool. Organizations that have taken the time to develop a total rewards strategy and are really clear on what their employee value proposition is are five times more likely to report their employees are engaged, and they're two times more likely to have better financial performance. 
 
Why is that?
 
You're an employee. We know that the number 1 reason people leave a job is for base pay. But when we look at what keeps people in a role and what really engages them it's not about base pay.
 
Why do fired CEOs leave the door with fat pay cheques?
 
I would imagine that most of these are negotiated when the CEO is first hired. Nobody minds when a CEO makes a lot of money as long as they've delivered real value for the performance of the organization. The problem is, it's not when they leave, it's what they've negotiated when they come on.
 
If you're paid too much, do you have a target on your back when layoffs come down? 
 
How much is too much? I don't think you ever want to be the person who's paid more than you're worth to the organization. Have open and honest discussions with your manager. Are there things that you could do differently? What does your manager think you’re really good at? What areas does she think you could improve on? If your skills are increasing and you’re adding value then you’re in a good place. 
 
How does demographics factor into the compensation picture?
 
We're now managing across generations. If we look at the Boomers, many of them are starting to think of retirement and might very well be interested in phased retirement. On the other extreme we have Gen Y  coming into the workforce. They've grown up in the information age. They have every bit of data at their fingertips and they're used to sharing everything.
 
So then is talking about compensation still taboo?
 
For the Boomers and Gen Xs I think it's still very much taboo. We've grown up when you absolutely just didn't do that. But I think the generations coming into the workforce now just have a completely different view. It's just growing up in a different time where you just didn't share information that easily whereas I think gen Y has grown up texting every thought. With Facebook, it's like everybody knows where you are, what you're doing and what you had for breakfast.
 
*Interview has been edited and condensed