Bonus payments received across the whole UK economy from April 2014 to March 2015 totaled £42.4 billion, according to the annual bonus payment report released by the Office for National Statistics (ONS), up 2.7 percent on the previous year and only 0.1 percent lower than the record level recorded in the financial year that ended in 2008.
In response to the ONS report, Lee Biggins, founder and managing director of job site CV-Library, was extremely positive about the findings, saying, “The fact that bonuses have increased by such a substantial level is great news for business and the jobs market. Bonus schemes are a proven way of incentivising and motivating staff, which has a significant impact on individuals and teams exceeding broader company goals, further contributing to business success and growth. Well-structured bonus schemes are also a great way of attracting new talent to an organisation, which is important in today’s competitive job market.
However, bonus payments decreased 9.6 percent in the financial and insurance sector to £13.6 billion from last year, whilst payments in the rest of the economy rose 9.7 percent to £28.8 billion.
“It’s not surprising that the financial and insurance sectors have not reached their pre-downturn levels as these had touched insurmountable levels in 2006-07,” continued Biggins, “However, the fact that bonuses have increased in the UK as a whole paints a promising picture and it’s hoped that industries still falling behind can catch up soon.”
The bonus payment levels reported today can be seen as an indicator that the UK economy continues to recover from the recession, with employees finally benefiting after weathering an extended period where reward levels stagnated. “The recession created a difficult climate for the recruitment market and it’s refreshing to receive positive news that will aid the growth of the UK jobs market,” Biggins concluded.
Yet, whilst bonus payments are up, average base salaries have still yet to increase. Advertised UK salaries stood at £33,505 in July 2015, down 0.6 percent from £33,696 in June and 1.1 percent lower than the £33,873 recorded in July 2014. This marks the first time advertised salaries have fallen on an annual basis since June 2014, with average salaries driven down by companies channeling resource into incentivising established middle managers and senior employees to stay, rather than recruiting talent from elsewhere.
Andrew Hunter, co-founder of Adzuna, commented, “Companies are clinging on to the skilled workers they already have, rather than bringing in new talent at the top. They are rewarding those loyal employees that stood by their side during the recession, but who hadn’t seen salaries rise since these lean years. Now, these employees are receiving their recession rewards, as workloads sprawl and middle managers become ever more important. Companies are returning to the classic pyramid structure, by nurturing their middle layer. They are relying more on managers to vet and oversee their junior staff, as more business comes through the door. But by boosting the salaries of their existing staff, employers have less money in the bank for recruitment. This means the jobs market focus has shifted from recruitment to retention.”