New research by global professional services recruiter, Morgan McKinley found that the City is not doing enough to encourage the next generation of professionals to build a career in financial services leading to a skills gap within the sector.
The Morgan McKinley Bonus Survey 2016, which assesses the impact of bonuses paid out to London’s financial services sector workers working in banking, asset management, insurance and the Big 4 accountancy firms, found that 83% of people with 1-2 year’s experience were dissatisfied with their bonus. Further, of the 25% who said they would leave because their bonuses were below expectations, the vast majority were from the millennial workforce.
“The millennial generation is now entering employment in vast numbers and will shape the future of the world of work. Attracting millennial workers is critical to the future of business. Despite the fact that London is the world’s leading financial centre and companies adapting to accommodate this social group by offering greater work/life balance through mobility initiatives and capped working hours, there is a growing dissatisfaction with the rewards a career in the City can bring,” commented Hakan Enver, Operations Director, Morgan McKinley. Financial houses are in danger of losing their biggest draw and losing talent to other sectors.”
According to the research, almost half of City workers either saw their bonuses decrease (26%) or stay the same (23%). Over 10% didn’t get a bonus at all.
“It seems that the days of the big bonus culture is diminishing and they are unlikely to return with banks appearing to be showing more restraint when it comes to paying out large sums of bonuses. Many city workers have reported a fall in their bonus packets compared to last year,” continued Enver. “However, whilst millennials may have been the most vocal in their dissatisfaction, it’s worth noting that at 30%, it was those who have more than 15 years of experience who saw the biggest squeeze in their bonus pots.”
The research also found that although bonus levels are in decline, businesses were looking at other ways to reward employees. Of the 38% who either did not receive a bonus or whose bonuses had remained the same, a third (31%) were compensated with an increase in fixed pay/basic salary.
“The public may be happier that the days of controversial bonuses are over but it’s clear that the industry needs to do much more to make jobs in the city attractive. With 82% of respondents suggesting they felt that bonuses encourage better performance, it’s clear that the sector has not yet found an enticing alternative to the entrenched bonus mindset,” said Enver. “The challenge for banks continues to be striking the balance between retaining their talent, particularly now that only 100% of basic salary can be paid out to an employee (or 200% with shareholder approval) and acting responsibly in the eyes of the public so that their businesses remain competitive in the long term.”