Bonus expectations make candidates cautious about job hopping
The ongoing international debate about long-term bonus reform has distracted us from the more immediate fact that bonus expectations are once again affecting the Australian employment market.
As the calendar year draws to a close, candidates are getting cautious about moving not just because of last-in-first-out, but also because they don't want to miss out on bonus payments in early 2010.
While the sums involved might not be massive compared to the banking-boom days, most employees at least expect to get the same as, or slightly more than, last time round. And the trend towards deferring bonuses and paying them partly in equities could also help convince some that staying is better than going.
"As opposed to this time last year, expectations are now growing about a reasonable 2010 bonus season. People are now starting to think that they won't leave unless they get a sign-on or guaranteed bonus," says Michael Notley, director, Taurus Financial Recruitment.
But, adds Notley, "the carrot has to be big enough, especially if the bank has a recent history of problems with the global financial crisis."
The truth about guarantees
Trouble is, most banks won't buy out your bonus unless you are a senior revenue generator. Recruitment levels are recovering, but we're still not in 2006 territory - employers continue to control the market.
Recent high-profile moves between Merrill Lynch, JP Morgan and UBS - which, according to recruiters familiar with the deals, did involve bonus guarantees - have made some candidates incorrectly assume that they too will get a guarantee when jumping ship. In reality, for most bankers, staying put is the best way to lock in a bonus.
"To have suddenly gone from a hiring drought four months ago to the pick-up we are experiencing today, means some people have unrealistic expectations about what's on offer for them," says Notley.
Keeping it real
Rochelle Eades, manager of banking and finance at Robert Walters, also cautions candidates to be realistic about bonuses from both current and future employers.
"Most bankers are hoping to see an increase in the size of bonus payments as would be expected given the rise in volume and activity across the market, but also the majority are wary of where we have all come from and are just happy to have a job and something in the form of recognition for hard work put in," adds Eades.
