BarCap's golden handcuffs for techies

Barclays Capital may have created some innovative golden handcuffs for its technology and operations professionals - paying a proportion of bonuses upfront on a monthly basis.

So-called annual fixed payments (AFP) are being offered to staff in non-front office roles to incentivise them to stick around, according to a number of different sources. This is, however, unconfirmed by the bank which did not respond to calls for comment.

Essentially, AFPs are discretionary guaranteed bonuses, paid up front as part of a monthly salary on a pro rata basis. The scheme has been in place since January 2010, according to sources

For example, imagine you're likely to receive a 100k bonus, and the bank offers to pay 40% of this as an AFP. This means 40k is split into 12 monthly payments that are included within your regular pay packet. If an employee leaves before the end of the year, they are required to pay this back.

"It's essentially a rather innovative retention tool," says one source. "They've invested a lot getting these people onboard, and this is a clever way of making it harder for them to leave."

With the active levels of recruitment in the IT in finance sector, there's been upward pressure on base salaries this year anyway. The average techie has seen pay increase by 8-12.5%, according figures from recruiters The JM Group.

More aggressive buybacks from existing employers are also forcing up salaries.

BarCap has not been immune to this pressure to raise base pay, but views the AFP as an extra discretionary incentive, according to sources.

"Essentially it's a golden handcuff," says one source. "Most firms have been forced to bump up base salaries, but this is an extra selling point."