Financial services firms boosting salaries as bonus cap looms | Robert Half survey

FINANCIAL SERVICES

Financial services firms boosting salaries as bonus cap looms: Robert Half survey

More than nine in ten UK financial services executives express concern about losing talented staff to other international centres as a result of the EU bonus cap, according to new research from Robert Half Financial Services.

With the EU bonus cap due to take effect from January 2014, which will see bonuses capped at 100% of fixed salary, or 200% with shareholder approval, UK financial services organisations are implementing measures in a bid to prevent an exodus of talent.

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Key survey results

According to the survey of 100 chief financial officers and chief operations officers at UK financial services firms:

• Nearly two-thirds (65%) of firms have increased salaries – by an average of 20% – in a bid to retain financial services professionals.
• 60% have increased benefits to staff.
• On average, organisations have increased salaries by 20% to offset the impact of the bonus cap, while nearly a fifth of organisations have increased salaries by more than 30%.
• Four in ten firms plan to increase salaries to offset the impact of the EU bonus cap.
• The majority of UK leaders are concerned (52% are “very concerned” and 41% “somewhat concerned”) that a rise in base pay will create an unstable cost structure.

Q: “How concerned are you about losing financial services talent to international opportunities as a result of the bonus”cap?

Very concerned: 38%
Somewhat concerned: 55%
Not concerned: 7%

Source: Robert Half.

Q: “How concerned are you that the bonus cap and resulting rise in base pay will create an unstable cost structure?”

Very concerned: 52%
Somewhat concerned: 41%
Not concerned: 7%

Source: Robert Half.

A final word

“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.” - Neil Owen, Global Practice Director, Robert Half Financial Services.

Want to know more?

The Robert Half 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.

Robert Half is the “world’s first and largest specialised recruitment consultancy and member of the S&P 500”. Founded in 1948, the company has over 350 offices worldwide. For further information www.roberthalf.co.uk.