Bonus culture in the City on the decline

Bonus culture in the City has declined with a 14% drop in employees receiving bonuses for 2012/13, according to research by Morgan McKinley Financial Services.

Its 2012/13 Bonus satisfaction survey, which questioned financial services professionals in London, found that 68% were paid bonuses in 2012/13, compared to 82% in 2011/12.

The research also found that 36% of respondents received a pay rise in 2012/13, while 47% said the same in 2011/12.

It also found:

  • 87% of respondents had bonuses of up to 30% of basic salary.
  • 22% got a bonus that was higher in 2012/13 than in 2011/12, while 41% received the same.
  • 36% were satisfied with their bonus payment, compared to 42% in the 2011/12 survey.
  • 47% of respondents said salary was the most important factor in switching jobs, while 34% said the entire compensation package was the greatest consideration.
  • 2% of respondents cited bonus as the most important factor when changing jobs.
  • If the European bonus cap is imposed, 83% of respondents would still not consider working outside of London.

Hakan Enver (pictured), operations director at Morgan McKinley Financial Services, said: “Looking at our last three surveys on bonuses, there are clear trends emerging across the sector. 

“Firstly, there is a decline in the number of professionals receiving increased levels of bonus year-on-year. 

“In addition, it seems from these results, and also from our regular conversations with City professionals, there is a much greater acceptance of the downward pressure on cost management and the knock-on effect on overall reward. 

“The underlying theme from all of this research is the culture change across the City which was synonymous for a long time with high rewards. 

“Those receiving bonuses are now fewer in numbers, the amounts being paid out are dropping and individuals are less satisfied. 

“We are finding professionals now coming to us to discuss their different motivations when considering opportunities for career development.”