While we hope 2023 will turn out to have been less tumultuous than the decade’s earlier years, it could be viewed as the year in which the recognition finally set in that the world had changed. It has now conclusively moved from an ‘Era of Markets’ (typified by deregulation, capitalism, and globalisation) that prevailed from 1989 to 2019 to an Age of Dislocation and Uncertainty.
Geopolitical instability has seen governments prioritising national security over global trade and a renewed appetite for levels of state intervention not seen in the ‘West’ since the 1970s. Given the challenges facing most economies, it is likely that this has set the tone for government policy over this coming decade. Elections are due in the US, the UK and for the European Parliament in 2024, but the new consensus on trade and security makes it look unlikely that any government will change course significantly.
Many of the challenges faced by governments and companies will be novel and unfamiliar. More frequent climate events, the transition to Net Zero, shrinking working-age populations and the resulting competition for skills and resources have stretched the creativity and responsiveness of governments and businesses, and will continue to do so. Some economists predict the return of labour power and the rise of the ‘labour share’ of GDP. The effect of this is likely to be uneven. High demand has already raised pay levels in some sectors and may lead to greater inequality of earnings at a time of slowing economic growth. This will inevitably increase the focus on transparency of pay, and on the effective management and development of people. It will be the task of HR and Reward professionals to develop organisations with the strategic capability to anticipate and shape the future.
It is for this reason that we have chosen to start our 2024 programme with an examination of the concept of Industrial Strategy – how it is defined, who owns it, and the distinction between ‘strategic’ and ‘political’ imperatives. Building on this theme, we will go on to examine the role and functions of companies in getting to Net Zero, and the potential contribution of reward in that process. This has implications for any Reform of Executive Pay Structures – leading to renewed challenges for corporate governance and Remuneration Committee Effectiveness.
Throughout the coming year, alongside our member services, PARC will continue to provide thought-provoking analysis, leading-edge research, and expert speakers. With over 80 diverse organisations in membership, PARC offers an unrivalled opportunity for peer-to-peer exchange in an environment built on openness and trust. As we focus on the forces shaping our world, we provide an essential networking forum for those responsible for the development of Performance and Reward Strategy. PARC will provide support to help our members understand, anticipate and respond to the rapidly shifting global business environment.
With the exception of our Peer2Peer Exchange events, all in-person speaker events will be recorded and made available as a digital resource on the PARC website.
Access the PARC 2024 Programme here.
Karen Clark, Phil Wills and Mike Haffenden