Morgan McKinley London Employment Monitor - February 2010

“Monitoring the pulse of the City jobs market”

Rise in deferred element of City bonuses as 47% receive higher payouts this year

2009/2010 Bonus Survey Highlights

A survey of 180 financial services professionals in London found that 47% of respondents received a higher payout in 2009/10 vs. 2008/09, while 28% received a similar payout
Nearly three quarters of respondents were satisfied (38%) or somewhat satisfied (35%) with the bonus they received
However, this year, a third of respondents (33%) stated that their bonus included a deferred payment element, up from only 13% last year

City Jobs Market Highlights

New financial services job vacancies in February 10 rose by 13% month-on-month
Compared to the same month last year, job numbers were up 67% in February 10, a similar uplift to that seen in January 10 vs. January 09
The number of professionals entering the jobs market in February 10 increased by 29% on January 10 and also rose by 29% compared to February 09
The average City salary stood at ₤51,560 – a 2% month-on-month increase
For those considering changing jobs in 2010, career development rather than remuneration was identified as the key reason (57%)

47% receive higher bonus payout than 2008/09

In March 10, Morgan McKinley’s financial services division surveyed 180 financial services professionals in London on their bonus payouts in the 2009/10 bonus round. The survey found that just under half (47%) of respondents received a higher payout this year compared to 2008/09. However when comparing 2008/09 bonus payouts to 2007/08, only 16% received a higher bonus, reflecting the changes in market conditions over this period.

In 2009/10, a quarter of respondents stated that they received a lower bonus than the previous year. This compares to 60% who received a lower payout in 2008/09 versus the 2007/08 bonus round.

Nearly three quarters of respondents were satisified (38%) or somewhat satisfied (35%) with their bonus payment this year.

Just over a third of respondents indicated that the structure of their total compensation package had changed in the last 12 months. When it came to bonuses being paid in cash or having an element deferred, 33% stated that part of their bonus was deferred. This was up from only 13% last year.

Salaries remain stable for the majority

In regard to total compensation packages, 71% of professionals cited that they were satisfied (42%) or somewhat satisfied (29%) with their total remuneration this year.

59% of respondents stated that their basic pay had remained at a similar level to last year, although 38% had seen a rise in basic salary.

The average City salary in February 10 increased by 2% month-on-month to ₤51,560.

Andrew Evans, Managing Director, Morgan McKinley financial services commented:

"It may seem surprising to see bonuses are up this year compared to last year, however many institutions performed relatively well in 2009 compared to 2008 and are continuing to reward employees based on the overall performance of the individual, the team and the business. It is the change in structure of bonuses as well as the overall make up of total reward that is significant. For example, our survey shows that while just under half of City professionals received a higher bonus than last year, over a third had part of their bonus deferred compared to only 13% in 2008/09.

It has always been the case that the City has used remuneration as a key way of attracting and retaining talent and this looks unlikely to change. However, how and what financial institutions pay their staff will no doubt continue to be the subject of intense scrutiny. In turn, we are likely to see a greater variation in the structure of employee compensation amongst different institutions as they find new ways to reward the brightest minds in the industry.”

Financial services hiring market continues upward trend

The financial services hiring market in London saw a second month of growth in 2010 with a 13% month-on-month rise in job numbers from 4,646 to 5,254 in the first full working month of the year. Compared to the same month last year, there was a 67% increase in job numbers from 3,150 to 5,254 in February 10. This increase in job availability follows the pattern of growth that began in Q2 2009 and has continued into 2010.

February 10 also saw a rise in professionals looking for new job opportunities with an increase of 29% from 6,760 to 8,740 month-on-month. There was also a 29% increase from February 09 to February 10 reflecting financial services professionals’ increased appetite to enter the jobs market.

Andrew Evans, Managing Director of Morgan McKinley’s financial services division commented:

“February’s data is particularly significant as it is the first full working month since November 09 and therefore gives us a more accurate picture as to the current health of the financial services jobs market. There is a continued upward trend in job numbers, showing a similar sentiment to other economic indicators. The 13% rise in available job opportunities in February 10 is relatively modest as anticipated, underlining that we are likely to see a gradual improvement in the hiring market over the year rather than a strong rebound. However, new job vacancies were up 67% on February 09 figures, a similar rise to January 10 versus January 09.

“The number of financial services professionals looking for new opportunities has risen, and we are seeing a greater appetite to consider a job move from professionals who are currently in work. Our latest survey highlights career development as the reason that most people would move jobs, ahead of a better salary or bonus.”

“We remain more positive about the outlook for the financial services jobs market compared to a year ago, however the depth of the recession in financial services should not allow for any complacency and the jobs market is still at a delicate stage of growth.”

Chart 1: New jobs vs. new candidates

Chart 2: Average salaries

-ENDS-

Further press information:

Alexandra Fleming                                    Elizabeth Faulkner
Tel: +44 (0)20 7438 3154                         +44 (0)20 7438 3155
Email: afleming@morganmckinley.com    efaulkner@morganmckinley.com

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Note to editors:

Statistical methodology

Survey
Morgan McKinley conducted a telephone survey of 180 employees working in financial services institutions in London between 2nd March and 12th March 2010. The majority of respondents (75%) were at the mid-senior level earning between ₤35,000-₤80,000. The aggregated results of the research are used in this edition of the Morgan McKinley London Employment Monitor.

Morgan McKinley also conducted a survey amongst 200 financial services professionals working within investment banks and financial services institutions in London between 24th – 28th March 2009. Some of the results of this research have been used in this edition of the Morgan McKinley London Employment Monitor.

Salaries
Annual salaries are based on confirmed placements by Morgan McKinley in a particular month. Salaries are segregated into three pay groups:

Support and administration: Secretaries, receptionists, statistical assistants, administrative clerks, settlement clerks, fund administration, trade support, graduates, client services (salaries ranging from £20,000-£34,000)
Middle market professionals: HR officers, junior analysts, project managers, financial controllers, product controllers, portfolio analysts, business analysts (salaries ranging from £35,000-£60,000)
Directors and senior professionals: Corporate finance, bankers, fund managers, senior analysts (salaries ranging from £61,000+)

Monthly new jobs and new candidates
These are based on Morgan McKinley’s own weekly records of new permanent job vacancies and new candidates registering with the firm for permanent employment. Statistics for the full market are derived using Morgan McKinley’s market share.

About Morgan McKinley
Morgan McKinley is a global professional recruitment consultancy connecting specialist talent with leading employers across multiple industries and disciplines.

With 24 offices across the UK, Europe, the Middle East and Asia-Pacific, its professional recruitment expertise spans across Banking & Financial Services, Commerce & Industry, Public Practice, Public Sector & Not For Profit and Taxation. Morgan McKinley is a preferred supplier to many of the major employers in its specialist sectors, as well as thousands of smaller local employers.

Morgan McKinley is a fully owned subsidiary of Premier Group.