When is it OK to cut pay AND boast about hiring?

The sitcom "Keeping Up Appearances" could be just as well about the global financial services industry these days.

As a result, cutting costs and bonuses has become a badge of honor among fund managers, who now tout their own frugality as they once touted rich returns and lavish pay. A prime example is Martin Currie's chief executive, Willie Watt, who took to The Times last weekend to brag of how the company's bonus cuts saved up to 50 jobs from the accountants' guillotine. Watt also noted, however, that Martin Currie plans to add as many as 19 posts this year.

A spokeswoman for Martin Currie told eFinancialCareers that the additional jobs will be "across the board, at all levels of seniority."

Late last year, fund management CEOs including Jeff Meyer of Gartmore publicly said they expected deep cuts in bonuses for fund managers. Some fund managers braced themselves for cuts as deep as 35%, according to Financial News.

Martin Currie is a prime example of how fund managers have learned to play the game of public perception: cutting bonuses and costs to curry public favor, only to keep paying bonuses to the best performers and add to areas where they could stand to improve.

"The overall headcount numbers are reduced a little bit, but firms are looking to improve the quality of the people they've got," said Richard Fletcher, managing director of recruitment firm Fletcher Jones.

Fletcher said most fund managers are looking to improve their performance - no surprise there - which translates to a concentration on front-office roles like chief investment officers and a greater boost of staffing in risk management. But, although such hiring has been steady for nearly a year, it is still difficult to land a post. "Never underestimate the competition," Fletcher advises job-seekers.

Harris Keillar, founder of Edinburgh-based recruitment firm Keillar Resources Ltd., believes that many fund managers are glad to have an excuse to clean house a little, particularly in a time when so few of their best performers can jump ship. "I think companies are secretly quite pleased," said Keillar of the bonus cuts at many fund managers. "The public face will still be 'oh, this is terrible.' But they can reallocate the money to good performers and take on more people."

The CEOs of these fund management firms are not, however, as powerful as they once were. Instead, accountants and other financial types are the ones raising red flags on compensation. "The bean counters are seeing their power increase within the companies because costs are their area of expertise and costs are something which have to kept under control," Keillar said.