Banks face war of retention

As hiring continues to outpace supply, the chief executive of one City of London recruiter says banks are paying more attention to keeping hold of the staff they've already got.

"We're into phase two of the war for talent," says Rob Thesiger, chief executive of recruitment firm Morgan McKinley. "It's not just about attracting people with big salaries and big bonuses, but about staff retention."

Like other recent studies, Morgan McKinley's latest market study paints a picture of rampant hiring and reticent candidates. Based on extrapolations from the company's own business, it says the number of new financial services jobs coming onto the market rose 54% in March 2006, compared to March 2005.

By comparison, it suggests the number of new candidates fell some 15% during the same period.

Thesiger says the lack of new candidates is partly down to the generosity of the recent bonus round: "There have been less post-bonus musical chairs in the City than usual - most people were paid what they expected."

He says it's also down to banks' newfound enthusiasm for non-monetary benefits. One bank, for example, is understood to have installed a shoe-shine person in its lobby, while others are redoubling their efforts to place staff internationally and offer greater visibility about future opportunities within the firm.

"People won't move for 5,000 on top of their basic salary any more," says Thesiger. "They're looking for careers that will land them where they want to be in ten years' time."

There are indications that hard cash inducements aren't entirely forgotten, however. Morgan McKinley says the average City of London salary rose 10% to 51,571 last year, and that salaries for senior City professionals rose 20%, to an average 82,400.