In this article, Lucy explores how the Reward function is moving from a behind-the-scenes support role to a core strategic lever for performance, cost management and retention. Drawing on her conversation with Benjy Sanford, she highlights why data-driven Reward expertise, stronger governance and emerging AI tools are making Reward one of the most commercially influential capabilities within modern HR.
However, as organisations face tighter talent markets, greater regulatory scrutiny, and increasing pressure to link people decisions to financial outcomes, Reward has moved firmly into the strategic spotlight.
This shift matters now more than ever. The way firms pay, incentivise, and retain talent is becoming a defining driver of performance and increasingly, of enterprise value. As a result, the professionals shaping these decisions are being asked to do far more than simply run annual cycles.
Following our recent quarterly report, which highlighted growing concern around the talent pipeline in specialist functions, I sat down with Benjy Sanford. Benjy began his career at McLagan before taking on Head of Reward roles at both Hg and Elliott Management. Given his experience operating Reward at the sharp end of complex, data-driven organisations, we wanted to explore the role of Reward in practice: what it really does, where Reward talent comes from, and how emerging technologies such as AI are beginning to reshape the function.
To ground this discussion, we structured the conversation around the questions that come up most often from senior leaders, HR teams, and those considering a career in Reward. Our aim was not only to demystify the function, but to explore why Reward is becoming increasingly critical to organisational decision-making, and why it is now one of the most strategically influential “left-brain” roles within HR.
“Reward teams design and run the programs that determine how a firm motivates, retains, and engages its people – primarily through pay and benefits.
At a basic level, this means operationalising core processes (such as the year-end cycle). But in more proactive teams, the role goes far beyond mechanics: shaping Reward philosophy (“What behaviours do we want to incentivise?”), defining the right pay mix, designing retention mechanisms, and navigating tax considerations.
Reward also acts as the pivot between HR and Finance, ensuring that headcount and Reward decisions are fully reflected in financial planning. While Reward should sit within HR, its positioning allows HR leaders to see and weigh all the compensation and benefits levers when making decisions on hiring or exits. Without that visibility, it’s almost impossible to manage people decisions effectively.
What becomes clear is that Reward is less about pay administration and more about trade-offs. Every Reward decision reflects a view on risk, performance, culture and cost – and increasingly, these decisions sit at the heart of how organisations grow sustainably. As people costs continue to represent one of the largest line items on the P&L, the strategic importance of Reward becomes unavoidable.
This is one of my favourite questions -and the answer is a resounding no!
Reward is busy all year, because people decisions happen all year. New hires (and their buyouts), promotions, role changes, mobility, and separations all carry a Reward dimension. Even in a reactive Reward team, these come up daily. Proactive teams go further, continuously assessing practices against the market and bringing new ideas to the table. Add to this the annual renewals of pensions and benefits, plus ever-increasing regulatory disclosure requirements, and there’s never a quiet season.
This misconception often explains why Reward teams are under-resourced or engaged too late. When Reward is only brought in at year-end, organisations miss the opportunity to use compensation as a proactive lever, rather than a reactive fix.
Alongside HR Operations and Systems, Reward is what I call “left-brain HR” – in contrast to “right-brain HR” functions like Talent and Business Partners.
Reward professionals must be highly process-driven, data-savvy, and uncompromising in their attention to detail, but accuracy isn’t the end goal. The real value is translating complex data into insights that the wider HR team and business can act on.
Because of this blend of skills, Reward professionals often come from consulting or finance backgrounds, where comfort with numbers and structure is second nature, rather than from traditional HR career paths.
As organisations demand more commercial rigour from HR, this skillset is becoming increasingly valuable. Reward professionals are often among the few people leaders who can comfortably sit between spreadsheets and strategy – a capability that is only growing in importance.
I see challenges on two main fronts.
First, Reward still faces something of an image problem. Many colleagues underestimate the breadth and depth of its role, and it can easily be overlooked between HR and Finance. The best Heads of HR and CFOs recognise its strategic value, empowering the team as trusted advisers, but not all firms have Reward functions at all – splitting responsibilities between HR and Finance – that approach simply doesn’t scale.
Second, the operational challenge. Technology is evolving fast, with AI-enabled tools well-suited to the quantifiable nature of Reward, yet, because of the sensitivity of the data involved, adoption has often been cautious. The question for leaders is where to embrace AI (for example, agents that answer benefits policy questions) and where to hold back (for example, delivering separation agreements).
This tension between opportunity and risk is where leadership judgment becomes critical. Firms that wait too long to modernise their Reward infrastructure risk falling behind, while those that move too quickly without governance risk undermining trust.
I believe we’ll see growing AI enablement in Reward, with secure agentic AI tools empowering employees and managers directly. Imagine line managers instantly modelling compensation scenarios (from rules defined by the Reward team) or employees navigating benefits choices through AI, freeing Reward professionals to focus on strategy rather than transactions.
In sectors like technology and financial services, I also expect more Heads of HR to emerge from Reward backgrounds. Senior leadership is increasingly demanding data-driven insights on people decisions, and Reward leaders are uniquely equipped to connect the numbers to the firm’s most important asset – its people.”
What this conversation reinforces is that Reward is no longer a specialist back-office function – it is fast becoming one of HR’s most strategic capabilities. As organisations grapple with talent scarcity, cost pressure, and technological change, the ability to make smart, data-informed Reward decisions will increasingly separate those that scale effectively from those that struggle. For HR leaders and executives alike, the message is clear: investing in Reward capability is no longer optional – it’s a necessity.
If you would like to be part of these discussions in our Reward fireside chat series, get in touch and let’s explore a conversation from your perspective.
