- Only 60% of financial services professionals are confident of receiving a bonus for 2012/13
- Of those who expect to receive a bonus, 89% expect it to be no higher than 30% of their base salary
- Over half (57%) anticipate their bonus will be the same as last year, while 27% expect it will be higher
- 33% of those who don’t expect a bonus think their employers will not be paying bonuses at all for 2012/13.
London Employment Monitor November 12 highlights
- Month-on-month job availability in London’s financial services sector fell by 15% in November 12
- This was a drop of 24% compared to the number of new jobs in November 11
- The number of new professional job seekers also fell month-on-month by 12%
- Compared to the same time last year, this was a drop of 60% in November 12
- The average salary change for those securing new roles in November 12 was an 8% increase.
Bonus expectations subdued overall
In November 12, Morgan McKinley carried out its annual Bonus Expectations Survey across the London financial services sector – interviewing over 500 respondents. The survey found that 60% of individuals expect to receive a bonus in the 2012/13 round – compared to 67% who thought this would be the case in our survey conducted in November 11. Of the respondents who didn’t expect to receive a bonus, one third believes their employer will not be in a position to pay a bonus for 2012/13, a number cited their company’s under-performance as a reason, whilst a proportion stated they don’t expect to receive anything as they are new to the business.
Regarding the value of respondents’ bonus payments, 89% think their bonus will be only up to 30% of their base salary – this is similar to last year’s survey when 85% said the same. However, 27% of professionals expect their bonus to be higher than in 2011/12.
Hakan Enver, Operations Director, Morgan McKinley Financial Services commented:
“Over the years, our bonus survey results have provided valuable insight into the views of professionals across the City, and it’s interesting to see how these opinions have changed over time. This year in particular the results show evidence of an increasingly cautious approach to year end bonus payments; those who do expect to receive a payment (60%) are fewer than last year (67%) and considerably fewer than two years ago (88%).
“Overall, responses suggest that the reality of reduced bonus payments as a result of subdued business activity and global market uncertainty is hitting home amongst financial services professionals. We are no longer seeing bonuses playing such a key role in negotiation of compensation packages across the board. Until the European Parliament votes on the type of cap on bank bonuses, which should be confirmed in 2013/14, for the majority of job seekers, the certainty and guarantee that comes with a higher fixed salary, is a greater priority.”
Hiring activity slows down
The London Employment Monitor registered a 15% drop in hiring activity from 2,457 in October 12 to 2,079 in November 12. Compared to the same time last year when there were 2,725 jobs in the market, this was also a drop of 24%.
The number of professional job seekers fell 12% in November 12 to 3,886 – the lowest level all year, down from 4,429 in October 12. This fall was also a large drop of 60% compared to the same month last year when 9,675 professional job seekers entered the London financial services market.
The average change in salary for those who started their new roles in November 12 was a 6% rise more modest than the 20% uplift seen in October 12.
Hakan Enver continued:
“Inevitably at this time of year, the hiring market is starting to slow down. Previously we reported that hiring activity would start to peter out from the second half of November, which is what our figures are now showing both from an employers’ and candidates’ perspective. The market has actually registered the lowest number of new jobs for the entire year of 2012 and at 3,886 the number of job seeking professionals in the City is at its lowest level since January 04. This data is in line with a CEBR report published in November 12 which highlights that London is starting to fall behind competing financial centres. During 2012, the number of jobs in London fell below that of New York for the first time in 12 years.
“From the job seekers perspective, taking into account seasonal factors, as well as recent redundancy announcements, it is likely that professionals are slightly nervous about looking for a new position. With the end of year in sight, many people will simply keep their heads down and hope to receive a modest bonus in the early part of next year before considering the next step in their careers. Interestingly, those who are moving roles seem to have motivating factors aside from remuneration. The average salary change in November 12 was an 8% increase. This continues the upward trend for 2012 and ties in with our survey which found that 97% of professionals think salaries will stay the same or rise next year in their organisations.”