Needless to say, the last year has been tough for the financial services sector. With banks continuing to take the brunt of the economic climate and banker bonuses appearing in the news on a daily basis, the industry has certainly been faced with a lot of scrutiny.

However, like any other trade, the financial services sector still needs to be able to attract and retain key talent for future growth and development. In order to do this though, it is vital to first understand the needs of current and future employees, and what they are looking for in a job.

To address this issue, McGregor Boyall recently carried out a survey of 5,350 risk, compliance and product control professionals to gain a clearer indication of what is going on in the industry. Through a series of questions surrounding salaries and bonuses we were able to not only assess what the current situation is like, but also evaluate how it is likely to change, and what the influencing factors are when job hunting. The results certainly proved interesting.

There’s still movement in the sector
In such an uncertain economic climate, there tends to be a general perception that it is safer to stay in a role than risk moving jobs. However, despite the press dishing up an almost daily diet of doom and gloom, our survey found that almost a third of risk, compliance and product control professionals reported they had moved jobs in the last twelve months. Interestingly, almost 60% used a recruiter to find their new role, with only a small number relying on direct application (7%) or job boards (2%). Businesses are still fighting for talent though, with 7% reporting they were head hunted directly by the employer.

When asked what factors would influence their decision making when seeking a new job, base salary and overall compensation were seen as the two most important factors, although it is well worth noting that career progression and work life balance came a close third and fourth.

Interestingly though, those surveyed appeared to recognise and accept that organisations in the financial services sector are moving away from bonuses as an employee attraction and retention incentive. Bonus potential was ranked as one of the three least important influencing factors in the job hunt. This is further reflected in the fact that 40% of respondents believed the current market conditions will lead to a decrease in bonuses for 2012 / 2013. Only 13% remained positive, anticipating a rise in bonus levels.

Bonuses may be down, but salaries are up
Whilst bonuses for this year obviously suffered, just over 40% of our sample of risk, compliance and product control professionals have seen salary increases of up to 20% over the last two years and 16% have seen rises of over 20%.
We know that risk, compliance and product control are all evolving as a consequence of the financial crisis and the regulation of banks. In light of this, there’s demand for experienced professionals, so it’s perhaps unsurprising that we have seen salary increases. 57% of respondents had had some form of raise in their pay over the last 2 years, with 29% experiencing no change, and only 14% seeing a decrease. This suggests that, even in tough times, their value is being recognised in over half of cases.

Linking to this, a large number of professionals (80%) were eligible for a bonus in 2011/2012. Just over a quarter of those surveyed were given 10% of their base salary or less, almost a quarter received over 30% and one in ten obtained between 11% and 30%. Again, it is implied that compensation measures are being taken in order to hold onto talented individuals.

However, participants were unsure as to whether or not this would continue to be the case. With regard to salary and bonus expectations for next year, there was a mixed bag of results, perhaps reflecting the uncertainty of these difficult times. 71% of respondents thought that, due to current market conditions, their salary would stay the same for next year. With bonuses, just under half (47%) of respondents predicted it would stay the same.

Looking at these findings, it begs the question: how important is money? The results of our survey revealed that, when asked what factors would influence their decision whilst job hunting, salaries and bonuses were significant. Base salary and overall compensation were seen as the two most important influencers, but were closely followed by career progression and work life balance.

This suggests that payment rewards are important, but they aren’t everything. There are other motivators, and businesses can’t afford to ignore them if they want to keep hold of their employees and attract new talent. It is becoming widely recognised that money incentives in the sector are simply unsustainable and will only add to the negative perceptions of the industry which are so easily batted around.

As organisations are forced to move away from this traditional pay incentive, perhaps the results of this survey can provide an indication of other factors employees are looking for. With career progression, work-life balance and the opportunity to expand skills sets ranking highly on the list of influencers, businesses must make sure they have an offering which appeals on these levels. And don’t stop there either. Make sure staff and potential employees know the opportunities available to them, otherwise you could be missing out on the best talent.

So, yes, money still talks, but not at all costs.
Laurie Boyall is Managing Director of McGregor Boyall the  financial services recruitment specialist for Change &Transformation, Compliance, Executive Recruitment, IT, Marketing, Product Control &Valuations, Risk