Financial services professionals expect a pay hike
- Financial services professionals expect a 13.5% pay hike in 2011, costing a total £3.1bn
- Although sector salaries rose by almost 8% last year, this was below the 13% rise expected at the beginning of 2010
- Job retention improved as length of service rose by over 5% last year
Financial services professionals expect to earn an extra £4,900 this year, which would cost their employers an additional £3.1bn.
According to research from accountancy and financial services recruiter Marks Sattin, professionals in the sector expect a 13.5% salary increase in 2011, supplementing an 8% increase last year.
In 2009, the average salary in the sector stood at £33,700 and this rose last year to £36,400 – a rise of £2,700 for each employee. Nevertheless, workers at the beginning of 2010 had expected their salaries to rise by just over 13%, which means that last year they each earned £1,800 less than they had hoped for.
This level of expectation means that workers in the financial services sector are hoping for the average salary to hit £41,300 this year. However, if 2010’s underperformance is repeated it will mean that the average sector salary will rise by only 8.5% to £39,500.
As a proportion of salary bonuses were flat but in 2010 people took home 8% larger bonuses because salaries were higher. In 2010, average total remuneration in the sector was £43,300 – an 8% rise from 2009.
Dave Way, managing director of accountancy and finance recruiter Marks Sattin says: “Basic salaries came in below expectations in 2010 as employers sought to restore recession-battered margins. However, financial services professionals are optimistic that 2011 will see business continue to pick up in the sector. Despite significant economic challenges ahead, UK companies exceeded earnings expectations in the latter part of 2010 and the most recent M&A figures have also suggested a return to growth in the sector.
“But to expect a 13.5% average salary rise may be excessive. The most recent GDP figures along with continuing public sector spending cuts have made the outlook for UK business far from certain. While there is plenty of room for optimism, it’s important not to get carried away.
“2009 was the worst bonus year in the UK for more than a decade and since the recession there has been strong political pressure on employers to limit their bonus payments . This is reflected by flat bonus growth last year and has increased the importance of salary growth as employers seek alternatives to compensation through bonus spending”.
Longer service
Job security for financial services professionals improved during 2010 as the average time spent by workers in their current roles rose to 31.5 months – two months longer than in 2009.
Dave Way says: “Rising job retention levels, but lower than expected wages indicate that job security was a high priority for financial services professionals last year. The big shakeout in financial services happened during 2009 so, having streamlined their workforces, employers were in a better position to avoid making further redundancies in 2010”.
Temp earnings
Marks Sattin’s research also revealed that those employed on a temporary basis saw their total annual pay rise by only 2% - below the rate of inflation. Nevertheless, annualised temporary incomes remain significantly higher than those of permanent and contract workers. The average temp earned an equivalent £45,100 in 2010 – 24% more than their counterparts on contracts and in permanent positions.
Dave Way comments: “Temporary workers had a tough 2010 as employers tried to control their wage bills by reducing their reliance on short-term labour. This is part of the deal for temps. When companies are growing rapidly, there’s plenty of money to be made, but when employers are being cautious, temps often bear the brunt. Nevertheless, even with a real terms pay cut last year, temps still out-earned employees in longer-term positions, which shows how lucrative it can be to work on an itinerant basis”.
