Investment consultancy Hewitt has reversed its controversial plan to pay staff bonuses based on company-wide performance rather than on individual units after several high-profile departures.
The plan, introduced last year, led to cuts of up to three quarters of bonus pay for consultants because they were no longer rewarded through their individual units' performance. Scores of staff left the US, UK and European consulting practices.
Yvan Legris, head of UK consulting, said consultants would be paid a bonus based on the success of their division from this month. Some will also receive large one-off payments to compensate for bonuses they did not get last year. He said the move had considerably changed the pay of the consulting practice but warned there would be a lag before the reinstated structure curbed departures.
John Park, chief financial officer, admitted retaining consultants was a challenge. He told analysts last month: "We are taking action to ensure our consultants are appropriately rewarded for, and engaged in, their work with Hewitt."
Seven consultants have left the UK consulting practice in the past two months. Departures include Michelle Williams, who resigned after seven years to work for L&G. Emma Fairgrieve is leaving for rival Psolve, consultants Richard Williams and Stephen Bowles are heading to Prudential and Claire Gilmour has left for Fidelity. Stephen Keating, who was on secondment from the US, has also left.
Hewitt's Dutch business is losing Dick van den Oever, who is starting an advisory business, and Eddy Bannet. Investment banks and annuity providers have been hiring from investment consultants in the past year, putting pressure on the talent pool.