Bonus Expectations Survey highlights:
· Morgan McKinley’s annual Bonus Expectations Survey in November 11 found that 67% expect to receive a bonus in the 2011/12 round (compared to 88% in last year’s survey)
· However, only 14% think their bonus will be higher than last year, while 32% expect it to be lower and 45% predict it will remain the same (compared to last year 48% expecting higher; 41% expecting the same and 7.5% lower )
· Overall 85% of respondents anticipate that bonus payments will be up to 30% of base salaries including 45% who predict their bonus will be no more than 10% of their base salary (compared to 73% last year who expected up to 30% of base salary as bonus).
London Employment Monitor highlights:
· Morgan McKinley’s London Employment Monitor in November 11 registered a 29% month-on-month drop in the number of available job opportunities for financial services professionals
· Compared to the same month last year, November 11 also recorded a drop of 42% in available roles across the sector
· The number of professionals entering the jobs market rose modestly by 3% month-on-month from October 11
· This figure was also an increase of 3% on the number of professionals interested in new roles in November 10
· The average salary for those starting new positions in November 11 dropped by 1%.
November 11 sees lowered bonus expectations across the financial services sector
In November 11, Morgan McKinley carried out its annual Bonus Expectations Survey ahead of next year’s Bonus Satisfaction Survey to find out views on forthcoming 2011/12 bonus payments. The results showed that two thirds are expecting to receive a bonus in this payment round, however this is down from 88% who, in the same survey a year ago anticipated receiving a bonus in the 2010/11 round.
Only 14% expect that their bonus payment will be higher than last year, while 32% are anticipating lower bonuses compared to last year. A year ago, 48% expected a higher 2010/11 bonus than the previous year, indicating altered expectations amongst those working across the financial services market in London. The majority (45%) think that their bonuses will remain the same as last year.
Forecasts for the size of bonus payments show that 85% of respondents predict their bonus will be up to 30% of their base salary, however most respondents have modest expectations – 45% think their bonus will be closer to 10% of their base salary at best.
Andrew Evans, Chief Operations Officer, Morgan McKinley Financial Services commented:
“Our recent survey shows a considerable change in expectations from financial services professionals regarding their bonus payments for 2011/12. Most notably, only two-thirds are actually expecting to receive a bonus – 20% less than last year. In addition, one third think their bonus will be lower than 2010/11, while only 14% expect it to be higher. As bonuses are directly correlated with the performance of financial institutions, these findings are in line with expectations. Morgan McKinley’s Employment Monitor has highlighted throughout this year that business performance across the banking sector has been less active than forecast. This survey also continues the same theme of lowered bonuses that we saw in our March 11 Bonus Satisfaction Survey where a third of respondents were unhappy with their bonus payment for 2010/11.
“From conversations with our clients across the market, there has clearly been a very significant focus on reducing costs across financial services institutions in London and beyond over the last few months. Staff costs vs. performance have come under particular scrutiny. This has been compounded by continued high profile discussions and regulatory proposals around compensation packages since 2009. Sentiment towards compensation from professionals has therefore been relatively uncertain and lacking in clarity as evidenced by only two thirds of respondents to our survey expecting to receive a bonus.”
Hiring market activity drops further as year-end approaches
The Morgan McKinley London Employment Monitor registered a 29% decrease in the number of available job opportunities for financial services professionals coming onto the market in November 11 from 3,859 to 2,725. Compared to the 4,725 jobs recorded in the same month last year, this was a decrease of 42%.
There was a 3% rise in the number of professionals entering the financial services jobs market in November 11 from 9,427 to 9,675 and similarly a 3% rise from the 9,390 job seekers looking for new roles in November 10.
Salaries for those starting new positions in November 11 remained stable as they have throughout the year, with a 1% drop compared to October 11.
Andrew Evans continued:
“The London Employment Monitor in November 11 once again saw a drop in hiring activity. To some extent, this is to be expected as we move towards the end of the year when hiring traditionally slows down. However this very cautious approach to hiring mostly reflects continuing issues impacting financial markets globally. November 11 saw much discussion although lack of clarity on Greece’s debt concerns; the fate of the Euro is in the spotlight causing significant uncertainty across Europe and banks’ continued inability to lend to each other is putting major pressure on the banking system around the world.
“Movement of professionals across the market in November 11 was mainly affected by three quite different factors. Firstly, fewer roles means less opportunity to move. Secondly, recent redundancies have led to more professionals actively entering the jobs market. Thirdly, as is typical of this time of year, many individuals actually stay put waiting for their bonus payments in the New Year. The net result of this is that we have seen a negligible change in the number of professionals looking for new roles compared to October 11.
“Looking ahead to next year, visibility for hiring activity remains limited for both job seekers and hiring managers. For now, clearly resolving eurozone issues will be crucial to improving financial markets’ performance and consequently hiring market activity.”
