Q&A: Peter Milne, director of financial services recruitment at Robert Walters
Recruiter Robert Walters' research into financial sector compensation tends to focus on middle and back office positions, where salaries have, by and large, remained relatively stable. What's more, as Peter Milne, director of financial services, reveals it's still risk and compliance pay that is increasing most dramatically. Still, as financial services organisations focus more on cost-cutting, candidates are moving jobs for reasons other than money.
Have salaries largely held up this year in the financial services industry?
Rather than reducing, salaries have actually remained relatively stable for the past couple of years and – overall – marginally increased in most cases. But there are some instances where recruitment demand has been so intense for some people that we have seen significant increases.
Our 2012 Salary Survey for example, shows that permanent salaries for banking operations professionals has actually risen by 1.8% over the past year. Contract rates have risen even faster – contractors are now earning 4.1% more in banking operations and 1.9% more in investment management operations than they were at this time last year. But we are seeing the biggest increases in risk and compliance. Permanent compliance salaries have increased 9.6% and risk contract rates have risen 13.8%.
In which sectors are candidates most likely to secure a salary increase? Are there any areas where salaries have been reduced?
No sector really stands out – the main trends we are seeing are more profession focused as detailed above. The focus on risk and compliance has been a key theme in the financial services recruitment market due to increased regulatory pressure across the sector.
Outside of these main themes, the best people will always secure salary increases – whether they are staying in the same role or moving to a new one. Employers know the value of the best professionals and are willing to be flexible in order to secure them.
Is it still possible to secure a pay rise by switching jobs? What advice would you give to candidates looking to do so?
Yes, absolutely but the days of significant increases are gone for most. If you are offered a job, you will need to be realistic in your demands. As an example, banking operations professionals can expect an increase in their basic salary of 5-10% when moving jobs. But employers are only willing to be flexible for the best professionals. To make yourself more attractive, you should look to upskill as much as possible.
Are candidates moving jobs for reasons other than money?
The large compensation rises we were seeing pre-2008 are long gone, so salary and bonus is rarely the determining factor for most job seekers. Indeed, our pay and compensation survey results from the last two years back this up. Last year, for example, 55% of respondents said their primary motivation for seeking a new role was career progression, compared to 20% who said pay rise.
How have new compensation structures – with a higher proportion of bonus payments in stock and more punitive deferral rates – been received by investment banking professionals? Has this resulted in better retention rates?
Changes to compensation structures for non-income generating professionals (such as lawyers and accountants) have not had a material impact on the low to mid ranking investment banking community. Deferred remuneration is reserved largely for senior ranking management and income generating investment bankers. But retention levels for key staff across both income generating and banker support functions have remained static due to the acute lack of confidence and availability of new opportunities (rather than in response to changing compensation structures).
Are people still moving post-bonus? Do they have many opportunities to go to?
The market is still challenging and there is caution about moving jobs. But – at the same time – recruitment is still occurring, particularly for roles that firms consider business-critical. There are also some exceptions to this and growth hiring is continuing – primarily in response to regulatory pressure, which means risk and compliance remain key recruitment areas.
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