The catch-all platitude of “cautiously optimistic” seems to have quietly dropped the caution. We’re on the cusp of breaking the all-time FTSE high, set at the turn of the millennium. George Osborne must be doing cartwheels down the corridors of Number 11 as the economy strengthens, just in time for the General Election in May. Is our economic recovery built on solid ground? We are being told that things are getting better, and yet, there still seems to be some anxiety in the City.
The compensation figures for 2015 seem to reflect our optimism but, there’s still a sense of disappointment. One of the inadvertent consequences of regulating bonuses is that fixed compensation has increased. Salaries have leapt accordingly across the board. Do higher fixed costs equal lower institutional risk? I don’t think so. Total compensation is up on average less than 5% – not too shabby in a deflationary environment.
Within most institutions the spread has narrowed – we’re back to paying average performers well on the basis that it’s better to have them in the business than not. Most bankers we’ve spoken to have acknowledged they’ve been paid well. However, with the caveat and slight grumble that they’ve worked harder than in previous years, in smaller teams.
Ultimately, there’s a feeling that compensation may have gone up but it’s not gone up in line with their efforts- “there must be more money”. As ever, some institutions have paid more than others but the difference in sentiment is really in how they’ve managed expectations. We’ll let you review the figures and draw your own conclusions.
At Dartmouth Partners, we’ve found our hiring partners are increasingly short-staffed and this has resulted in robust demand across all verticals and sectors. Investment Banking, Private Equity, Hedge Funds and Corporates all seem to want the same thing – well-trained, hungry, hard-working juniors. Unfortunately, there is a lack of supply and the best candidates are picking up multiple offers.
Buybacks, counter-offers and the decision to give it all up to join a start-up (and the promise of endless supply of free fruit, table tennis and flip-flops to work), mean that traditional industries are competing within an ever-diminishing candidate pool. Forward-thinking businesses are taking a longer-term approach and beefing up their Graduate and Intern offerings. Our Graduate Team is consequently hard at it, planning medium term campus attraction and retention strategies and sifting through thousands of Millennial candidates who have been raised with a “you can have it all” belief.
So, “The War for Talent” is firmly back on the agenda. We’re competing for an ever–decreasing pool of talent. The recruiter’s role of Attraction, Assessment and Acceptance is increasingly vital. Although, some quick wins have been made by recruitment “traders”, genuine partnership seems to be on the agenda for most firms. The Rocking-Horse is getting faster. Let’s hope we don’t come off it.
For a full copy of the bank by bank survey, please email us.