HR staff to pay themselves higher bonuses

Headhunters said HR bonuses are likely to be 10% higher this year than last, thanks to an improved business climate.

Raj Munde, managing director of Carter James, a search firm covering HR appointments, said junior vice presidents (VPs) received salaries of between 60,000 (€104,000) nd 65,000 in 2002, plus a bonus of 10% to 40%. Senior VPs received similar bonuses, on a salary of 70,000 to 85,000.

Typical bonuses this year could rise to as much as 45% at the top end, or about 28,000 and 37,000 for junior VPs and senior VPs respectively.

At some firms, base salaries could also be higher. In October, Stan O'Neal, chief executive of Merrill Lynch, announced the end of a two-year salary freeze for staff earning less than $100,000.

Michael Pickup, a consultant at Beament Leslie Thomas, a recruitment firm, said HR staff are likely to be among the beneficiaries.

Meanwhile there are sparks of life in the recruitment market. Sally Talbot, joint managing director at Redwood Search, an HR recruitment specialist, reported some demand for people to fill VP and junior director HR roles: 'Banks have not really recruited at this level for the past two years.'

Munde said pockets of HR hiring remained strong throughout the downturn: 'HR has been at the forefront of quite a few legislative initiatives. There has been consistently strong demand for people with solid employee relations experience, including diversity, as well as individuals with compensation and benefits expertise.'

He forecast higher recruitment for training and development roles, which were cut back severely during the downturn. Current job advertisements suggest he may be right. Banks are advertising for everything from an HR training manager, to a management developer and training coordinator.

Also required are senior HR generalists. Talbot said there is a trend for divisional HR teams, which work alongside business areas, to be eliminated in a move towards a more centralised approach.

Under this, staff in call centres deal with basic functions of recruitment and payroll issues. Senior staff address issues such as employee relations and change management across their company.

Headhunters said Merrill Lynch and Barclays Capital had already adopted this approach. Others, such as ABN Amro, were in the process of doing so.

Senior generalists need an understanding of different areas of the business and are already in short supply, said Talbot. She forecast banks will have increasing problems in finding them as the pipeline of junior talent dries up: 'Junior HR staff who have been working alongside the equities or fixed income departments don't want to work in a call centre.

'Many are leaving to work in fund management or corporate roles.'

Munde said low bonuses over the past few years have made many banking HR roles uncompetitive.

'We talk to a lot of candidates who say they would be willing to move into industry to achieve a better lifestyle balance. The financial rewards of working in investment banking have not been high enough to compensate for the demands on peoples' personal time.'