City employers forced to pay for "buybacks" as bidding wars return
Buybacks have returned to the City with a vengeance as bidding wars for bankers heat up says Astbury Marsden, a leading financial services recruitment firm. Buyback offers are lucrative counter-bids made by employers to staff who are resigning to join a competitor.
Mark Cameron, Chief Operating Officer at Astbury Marsden, says: "A surge in demand for qualified City staff means that now three out of four employees looking to switch jobs will receive competitive counter offers."
"This figure is up from just 5% at the start of 2009, when buyback offers were extremely rare. They were only really applicable to the very highest performers - the key money earners."
Astbury Marsden explains that existing employers are now offering those staff looking to hand in their notice an increase in their basic salary of between 10 - 20% to stem the flow of defections.
This is in stark contrast to the first half of 2009, when managers within City firms were actively looking to reduce costs and shed staff.
Mark Cameron says: "This time last year, managers would have secretly been delighted to see staff leave and cut their overheads. They would have done little more than wish the departing staff member good luck."
"Now employers are having to fight tooth and nail to secure the good, but not even necessarily the very best performers. The sheer volume of buybacks in the market is close to the peak witnessed in 2006 and bodes well for anyone looking to switch jobs."
"Too much work and too few qualified staff is the basic problem and as ever the City responds to that with its usual deal making spirit - that can see pay for an individual rapidly bid up."
Astbury Marsden says that as well as salary increases, current employers might also offer the employee a promotion or change of job title to cement their commitment to the firm.
Adds Mark Cameron: "To keep them on board, they might be given the chance to manage a team or given a more focussed and planned out career path."
Astbury Marsden says that City staff who have been offered the choice of a new job or a pay rise from their existing employer will still have to grapple with the fundamental dilemma of whether to stay put or head to pastures new. Some will decide"better the devil you know".
Mark Cameron concludes: "If no buyback offer is made, you can feel comfortable that you are leaving the organisation for the right reasons. The firm will have made a clear decision - that you are not a valued member of the team."
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