Financial services leaders plan to increase salaries in a bid to offset the impact of the EU bonus cap, according to Robert Half research.
- Nearly two thirds (65%) of firms have increased salaries in a bid to retain financial services professionals
- Four in 10 firms plan to increase salaries to offset impact of EU bonus cap
- The majority of UK leaders are concerned a rise in base pay will create an unstable cost structure
London, 19 August 2013 – More than nine in 10 (93%) UK financial services executives express concern about losing talented staff to international opportunities as a result of the EU bonus cap, according to new research from Robert Half Financial Services, a leading recruitment specialist. According to a survey of UK C-suite executives at financial services firms, nearly four in 10 (38%) are ‘very concerned’ and 55% are ‘somewhat concerned’ about the impact of the pending regulation.
UK financial services executives were asked: “How concerned are you about losing financial services talent to international opportunities as a result of the bonus cap?”
With the EU bonus cap due to take effect from January 2014, which will see bonuses capped at 100 per cent of fixed salary, or 200 per cent with shareholder approval, UK financial services organisations are implementing measures in a bid to prevent an exodus of talent. Indeed, the research reveals that nearly two thirds (65%) of organisations have increased salaries – by an average of 20 per cent – and six in 10 (60%) have increased benefits to staff.
The findings show that more than half (52%) of financial services executives are ‘very concerned’ and 41 per cent ‘somewhat concerned’ that the bonus cap and resulting rise in base pay will create an unstable cost structure for the organisation. Unsurprisingly, large companies and those based in are more concerned about this, with nearly three quarters (72%) ‘very concerned’ this will happen.
UK financial services executives were also asked: “How concerned are you that the bonus cap and resulting rise in base pay will create an unstable cost structure?”
On average, organisations have increased salaries by 20 per cent to offset the impact of the bonus cap, while nearly one fifth of organisations have increased salaries by more than 30 per cent.
Neil Owen, Global Practice Director, Robert Half Financial Services said:“Financial services leaders are evidently concerned about the impending EU bonus cap and its potential impact on the industry’s talent pool, particularly as firms look to their top staff to pursue growth strategies.
“A number of large UK financial services firms have already been examining ways to offset the cap, potentially raising salaries and benefits to retain key employees. With the UK competing with other international centres for the world’s top financial services talent, firms will need to strike the balance between risk and reward, with additional employee remuneration potentially creating an unstable cost structure.”
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Notes to editors
About the Survey
The survey was conducted by an independent research firm and includes responses from 100 Chief Financial Officers and Chief Operations Officers at UK financial services firms. The research was conducted in June/July 2013.
About Robert Half
Robert Half is the world’s first and largest specialised recruitment consultancy and member of the S&P 500 and #1 in our industry on FORTUNE® magazine’s “World's Most Admired Companies” list (2016). Founded in 1948, the company has over 325 offices worldwide providing temporary, interim and permanent recruitment solutions for accounting and finance, financial services, technology, and administrative professionals. Robert Half offers workplace and job seeker resources at roberthalf.co.uk and twitter.com/roberthalfuk.