Remuneration and bonus trends. The first quarter has historically prompted a financial flight in the industry.
- More than a quarter (28%) of companies expect to pay higher bonuses in 2014
- Recovery continues to drive concerns about losing top performers to other job opportunities for majority (87%) of UK financial services companies
- Nearly four in 10 (37%) UK businesses said the number of employee resignations increased following bonus payouts
London, 3 March 2014 – Remuneration for middle and back office staff at UK financial services firms is expected to rise in the first half of the year finds new research from specialist recruiter Robert Half Financial Services. More than half (55%) of financial services CFOs/COOs plan to increase base salaries for existing employees, suggesting that as the market for skilled professionals continues to tighten, companies are increasing pay in order to attract and retain skilled talent. Bonuses are also looking more promising, with three in ten (28%) executives increasing payments and 49% maintaining current levels.
The findings follow recent insight from the Robert Half Financial Services 2014 Salary Guide, which revealed that financial services companies already have to pay a premium to secure the best the market has on offer.
Following several years of stagnant or minimal salary and bonus increases, the resurgent job market has resulted in candidates feeling they can get more money elsewhere and requesting a rise in their current role. This is backed up by the fact that a high proportion of financial services candidates have increased their expectations for compensation. When asked how candidates’ remuneration expectations had changed compared to last year, almost half (45%) of businesses surveyed said they had risen, while 36% said they had stayed the same with 19% saying they had decreased.
The recovery continues to drive concerns about losing top performers to other job opportunities for the majority (87%) of UK financial services companies. In fact, four in 10 (37%) senior executives said that the number of employee resignations increased following the last year’s first quarter bonus period (when compared to other times of the year), prompting concerns that employee turnover will rise in the coming months once employees have been rewarded.
Neil Owen, Global Practice Director, Robert Half Financial Services said: “The first quarter has historically prompted a financial flight in the industry and while executives are rightfully concerned about the possibility of losing talent, these numbers are actually lower than what we would have seen in years gone by. Efforts to reduce risk by regulating remuneration have decreased the prevalence of employees looking for greener pastures following their bonus payout. While nearly four in 10 executives indicate that resignations increased following last year’s bonus period, compared to the rest of the year, it is significantly less than we would have seen in previous years. The prevalence of deferred, staggered and contingent convertible bonus payments as well as increased base salaries has had the triple effect of offsetting risk and providing capital relief to institutions while also decreasing employee turnover.
“As employees’ remuneration expectations increase, businesses must re-evaluate their compensation programmes, ensuring they are competitive on both a local and global scale. Consulting industry resources, such as the Robert Half Salary Guide for financial services will help companies benchmark salaries and tailor a benefits programme, presenting them as an employer of choice.”
Robert Half advises financial services companies to follow the following five tips to avoid the financial flight:
- Communicate with all staff clearly and regularly – ensure they understand the vision for the team/company and buy into it
- Outline business achievement targets for the year ahead, how personal performance targets feed into that and will be rewarded in the form of bonuses in 2015
- Understand individual motivations for each member of staff: flexibility and work/life balance may be more important to one member of staff than another
- Make sure that key players are getting the roles and responsibilities that motivate them – a rewarding environment is not just about the money that individuals earn
- Recognise that a recovery tends to lead to a ‘seller’s market’ in terms of senior roles – consider upping the ante for salaries and bonuses paid to your top 10% of people
About the Survey
1 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 December 2013.
About Robert Half
Robert Half is the world’s first and largest specialised recruitment consultancy and member of the S&P 500. We have once again been named to FORTUNE’s “World’s Most Admired Companies®” list and remains the top-ranked staffing firm (February 2020). Founded in 1948, the company has over 300 offices worldwide providing temporary, interim and permanent recruitment solutions for accounting and finance, financial services, technology, legal and administrative professionals. Robert Half offers workplace and jobseeker resources at roberthalf.co.uk and twitter.com/roberthalfuk.