Volatile global markets and the Eurozone woes have had a significant impact on employee attitudes and expectations since last year's survey
Uncertainty is having a marked effect on employee sentiment in the banking infrastructure sector. With average pay rises down and expectations muted for the coming year, a growing number of employees are registering with recruitment agencies to keep an eye on potential opportunities according to the Astbury Marsden Compensation Survey 2011.
The survey, which was conducted in September and October 2011, found that employees in London’s banking infrastructure sector saw their pay increase by an average of 12% this year. This brought the average basic pay across the sector to £82,874.
Although the increase was above inflation, it was at a lower rate than in 2010. Further, the proportion of employees who received an increase in basic pay fell to 44% in 2011, compared with 68% in 2010.
Bucking the trend
Although a more subdued environment, employees in some functions were able to secure a higher than average pay rise. This was the case for those employees in risk, where the average rise was 12.9%, and finance, where it was 13.5%. These two areas also had the highest average salary, at £91,647 and £89,634 respectively.
Securing a new position, whether internally or with another organisation, remains a lucrative option. Just over a quarter (27%) of those surveyed received a promotion in the last year. This brought with it an average base pay increase of 15.2%, compared with an average rise of 10% for those who were not promoted.
Moving to a new employer had an even more positive effect on salary. For the 24% of employees who moved companies in the last 12 months, the average pay rise was 19.2%. For the few (3.8%) who were able to combine a move with a promotion, the average increase rose to 20.3%.
Bonus expectations
Alongside lower pay rises, bonus expectations are also more subdued this year. Less than one third of respondents (32.6%) are expecting a bonus this year, down from the 55% that were expecting one this time last year. Further, two thirds of respondents do not expect their bonus to be higher than in 2010.
In terms of the size of this year’s bonus, expectations vary across functions. While the average bonus is expected to be 24% of base pay, finance professionals have the highest expectations with their eye on a 35% bonus. Meanwhile those in IT have the lowest expectations, anticipating a bonus of 16% on average.
Across all functions, the more senior roles had the highest bonus expectations. Director and managing director employees expect to receive bonuses of 42% and 70% of their base pay respectively.
Motivating employees
Good holiday allowances, pensions and medical insurance remain the most sought after employee benefits. More than 80% of those surveyed either valued these benefits highly or very highly.
When drilling down by function, holidays were most highly valued by people working in operations and middle office functions, while pensions were regarded as the most important benefit by a higher percentage of those in risk and compliance.
Employees in technology regarded flexible working hours as more important than their colleagues in other functions, with three quarters of them saying this was important. Similarly, those in compliance were most interested in subsidised gym membership, with 44.4% stating this was an important benefit.
At the opposite end of the spectrum there was most ambivalence around company cars, financial advice and childcare. Around half of those surveyed said they didn't care whether their package included a car or financial advice.
Pay is also a key motivator. Here, the report found that the majority of employees would rather have an increase in their fixed rather than variable pay. This was particularly the case for middle managers, where more than 80% of those surveyed stated they would rather see their fixed pay increase. This reflects the desire for greater certainty in uncertain times.
Employee sentiment
Greater uncertainty also appears to be influencing the behaviour of employees. In 2010, almost 50% of employees disappointed by their bonus and overall pay package said they would try to change employers. This year, only a third of respondents said they'd take this action.
Instead, this year’s disgruntled employees are more likely to look at ways to improve their position with their employer. This includes seeking promotion opportunities or a position in one of the overseas financial services centres such as Hong Kong or Singapore.
But, while more employees are choosing to stick with their current employer, there has been a marked increase in the number of employees registering with agencies to monitor potential opportunities.
The new year
Whether this behaviour continues is likely to depend on market conditions in 2012. Although only a quarter of those surveyed expect government pressure or the Vickers Report to affect their compensation in 2012, expectations for pay rises do remain low.
More than half of those surveyed were uncertain about an increase and, among those who believe they will receive a pay rise next year, the average increase is down at 8%. Against this backdrop, it will be interesting to see whether employees look to improve their position with their current employer or seek new opportunities with another organisation.