Banking clients continue to rebuff ever increasing salary expectations
The improving financial sector has caused workers moving job or seeking promotion to expect a higher pay increase than is realistic.
Everyone loves to receive a pay rise, unless they are in a position where their remuneration is a hot topic and they would prefer to avoid the controversy.
That has certainly been true for those at the top of the financial sector in recent years, but there is another problem lower down, in which those moving from one job to another have been observed to have increasingly inflated their expectations.
It used to be the case that many people could enjoy a substantial 'uplift' in their pay when they moved from one job to another - often around 20 to 25 per cent. Now, however, a more realistic figure is ten to 15 per cent. This remains the case whether people have had a pay rise recently or have spent the last two years with their salaries frozen.
Pay pressures
The latest Marks Sattin Market Insight report has provided plenty of evidence that many financial sector staff will feel they have a motive to push for more money than may be realistic.
It found that while the majority of staff (71 per cent) had their last salary review within the past 12 months, only 67 per cent actually got a pay rise. In the London Financial services sector this fell further to 58 per cent. Of the rest, 32 per cent had their remuneration frozen and a tiny remainder had to take a pay cut. On that basis, a third will have been left disappointed - and that is not counting those whose pay rise was below inflation or still came below their expectations.
Indeed, the level of disappointment with current pay rates was also revealed in the survey. Less than half of permanent staff (46 per cent) said they were satisfied, with 30 per cent dissatisfied and 24 per cent more ambivalent. The figures for contract workers were very similar.
What is it worth?
For many people - and not just in the finance sector - the restricted nature of pay rises and frequent salary freezes over recent years have meant hopes of increasing income have depended more on getting a better paid job elsewhere. That simple fact may have much to do with the desire of some to move.
Indeed, the Market Report found 28 per cent of workers felt a pay rise of 11 to 15 per cent would be an acceptable figure to move job for, although 35 per cent would stay if their own employer offered a rise of 11 to 20 per cent to stay.
The report found that expectations that a job move would lead to a salary boost were particularly prominent in the London financial markets. This noted that the inflated notions of pay rises of up to 25 per cent were fuelled by publicity surrounding improving economic conditions. It also noted that while ten to 15 per cent is more realistic, many banks are capping rises for promotions at five to ten per cent.
The way forward
We would recommend that money alone should not be the motive for a job move, at least until the recovery is more deeply entrenched. For those looking for a new post now, the focus should be on the broad package, including issues like prospects for career development or work-life balance.
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