Morgan McKinley London Employment Monitor - September 09

"Monitoring the pulse of the City jobs market"

 

Bonus expectations 2009/10: 78.9% of City workers expect a similar or higher bonus compared to last year

‘Bonus expectations survey’ highlights

• With bonus season fast approaching, a survey of 200 of London’s financial services professionals found that 82% expect to receive a bonus for 2009/10
• Almost eight out of ten (78.9%) expect their bonus to be similar (40.4%) or higher (38.5%) than the amount they received for 2008/09
• When asked whether there were any plans to restructure the components that make up total compensation packages at their firm, 27.8% said their employer had or was planning to implement a restructure of this kind
• Of these people, 26.8% said this had resulted in ‘no change in basic salary and a decrease in bonus element’ and 23.2% said the change included an ‘increase in basic salary and a decrease in bonus element’.

City jobs market

• During September 09, the number of new financial services job vacancies in London fell 8% versus the previous month (August 09) and 35% compared with September 08
• New candidate flow increased by 1% in September 09 against August 09. This was a decrease of 32% versus the same month the previous year (September 08)
• Individuals who did secure a new role in September 09 took an average of 65 days to do so. This was six days longer than it took their counterparts a year ago (September 08)
• The average City salary registered £52,142, increasing 3% compared to August 09.

Bonus expectations 2009/10

According to a survey of 200 financial services professionals in London, conducted by telephone between 24th September and 6th October 09, 82% expect to receive a bonus in the forthcoming 2009/10 round. Almost eight out of ten (78.9%) of these individuals expect to receive a similar (40.4%) or higher (38.5%) bonus amount than they did last year. This figure is slightly more optimistic than the results of a similar survey conducted this time last year, which found that 63.5% expected their bonus for 2008/09 to be similar (46.1%) or higher (17.4%) than the year before.

 

This year, of the 18% of respondents who stated that they do not expect to receive a bonus in the next round, 7% said it was because their employer was not paying bonuses this year. Other reasons included ineligibility for a bonus because they had not been with the employer long enough (7%), poor team performance (0.5%), and redundancy (1.5%).

 

The majority (76.1%) of financial services professionals surveyed were in the £35,000 to £80,000 basic salary bracket. Taking this into consideration, 60.3% of respondents said they expected a bonus amount of up to 25% of their base salary. Almost a third (30.5%) said they expected a bonus of between 26% to 100% of their basic salary and 9.2% anticipate a bonus of 101% or more.

 

When asked whether their employer had already implemented or if they were planning to implement a restructure of the components which make up total compensation packages at their firm, 27.8% of respondents said yes. Of these individuals, 26.8% said their firm had or was planning to implement ‘no change in basic salary and a decrease in bonus element’ and 23.2% said the change was an ‘increase in basic salary and a decrease in bonus element’.

 

Andrew Evans, Managing Director of Morgan McKinley’s financial services division comments: “Given the improvement in market conditions over the course of 2009, it is not surprising that this survey suggests most of London’s financial services professionals expect to receive at least a similar or higher bonus amount than last year. However, this must be seen in the context that last years’ bonus payouts were at suppressed levels compared to the previous two years. By no means do these bonus expectations imply a return to the boom times and it will be interesting to see how these expectations compare to actual payouts in the New Year.

“There has been much discussion about plans to change the way total compensation packages are structured at financial institutions over the last few months. Over a quarter of financial services professionals surveyed said that their employer had already or is planning to restructure the components of total compensation packages. It has been the subject of speculation that any change would be an increase in basic salaries to compensate for a decrease in bonus amounts but, in fact, more respondents indicated that, at their firms, basic salaries were unchanged and bonuses had been reduced. It is still early days and so we will have to wait and see how the pay structures change over the coming months.”

 
Despite month on month drop, September records second highest number of new jobs this year

During September 09, the number of new job vacancies in London’s financial services jobs market fell by 8% compared with the previous month (August 09). Despite the month on month drop, this figure was the second highest volume of new job opportunities coming onto the market in any one month this year; registering 3,843 new jobs, second only to the August 09 figure of 4,158.

 

There was a minimal increase (1%) in the number of individuals who started to look for a new position during September 09 versus August 09. However, compared with the same month the previous year (September 08), this figure was down 32%.
It took jobseekers an average of 65 days to find a new role during September 09, which was six days less than it took their counterparts a year ago (September 08).

 

Andrew Evans, Managing Director of Morgan McKinley’s financial services division comments: “Despite the figures showing a month on month drop of 8% in the number of new City job vacancies, there was, generally, little change in sentiment amongst hiring managers from August to September. August recorded the highest volume of new job opportunities coming onto the market this year and September followed closely behind. Employers’ appetite to hire has continued to improve in the last month.

“Over the last few months, the health of the City jobs market has been steadily improving, albeit at a slow pace. If we look at where the hiring market was 12 months ago, in the immediate aftermath of the collapse of Lehman Brothers when many financial institutions had implemented hiring freezes on new headcount and the industry experienced large scale redundancies, we are now in a much more positive market.”

Average City salary

The average City salary increased 3% compared to August 09; registering £52,142. This was also an increase of 5% versus the previous year (September 08).
 
Chart 1: Compared to the bonus you received last year, do you expect your next bonus to be higher, lower or the same?
 

Chart 2: New candidates v. new jobs

 

Chart 3: Average City salaries
 
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Further press information:
Allira Carroll                                                Elizabeth Faulkner   
Tel: +44 (0)20 7438 3143                           +44 (0)20 7438 3155
Email: acarroll@morganmckinley.co.uk       efaulkner@morganmckinley.co.uk 

Alternatively, please contact the Press Office on +44 (0)20 7438 3150.

 

Note to editors:

Survey results
Morgan McKinley conducted a telephone survey of 200 employees working in financial services institutions in London between 24th September and 6th October 2009. The aggregated results of this research are used in this edition of the Morgan McKinley London Employment Monitor.

 

Statistical methodology

Salaries

Annual salaries are based on confirmed placements by Morgan McKinley in a particular month. Salaries are segregated into three pay groups:

• Support and administration: Secretaries, receptionists, statistical assistants, administrative clerks, settlement clerks, fund administration, trade support, graduates, client services (salaries ranging from £20,000-£34,000)
• Middle market professionals: HR officers, junior analysts, project managers, financial controllers, product controllers, portfolio analysts, business analysts (salaries ranging from £35,000-£60,000)
• Directors and senior professionals: Corporate finance, bankers, fund managers, senior analysts (salaries ranging from £61,000+)

Monthly new jobs and new candidates

These are based on Morgan McKinley’s own weekly records of new permanent job vacancies and new candidates registering with the firm for permanent employment. Statistics for the full market are derived using Morgan McKinley’s market share.

 

About Morgan McKinley

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With 24 offices across the UK, Europe, the Middle East and Asia-Pacific, its professional recruitment expertise spans across Banking & Financial Services, Commerce & Industry, Public Practice, Public Sector & Not For Profit and Taxation. Morgan McKinley is a preferred supplier to many of the major employers in its specialist sectors, as well as thousands of smaller local employers.

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