Fixed pay is to increase for financial services employees to offset bonus caps, according to research by Towers Watson.
A surveyof more than 150 financial services HR professionals at the consultancy’s annual Global financial services conference, found that more than half (53%) of banks and financial services organisations predict an increase in fixed pay for employees to partially offset the shortfall in employee incentives following planned European Union (EU) regulation to cap bonuses.
The research also found that:
- A third (33%) of respondents believe employers will pursue alternative pay strategies with a focus on broader reward.
- Just 7% of respondents predict a decrease in total pay as the primary impact of the regulation.
- 16% of respondents feel that reward will be the most important human capital issue to address in their organisation over the next 12 to 18 months.
- More than half (56%) of respondents plan to offset the impact on reward by formalising training and development programmes, while other areas of focus will include pension plans (20%), flexible-working arrangements (15%) and health and wellness programmes (10%).
- More than two-thirds (68%) of respondents predict that politicians and regulators are likely to have the greatest impact on industry reward over the next three years.
- New York (42%) is seen as the most likely beneficiary if financial services talent moved from the UK, followed by Hong Kong (26%), Singapore (16%) and Switzerland (11%).
Chris Fabro, managing director of Towers Watson’s financial services talent and reward practice, said: “Organisations will shift from an emphasis on buying talent to growing talent.
“This will require more significant career planning, architecture and analytics to ensure the development of employee capabilities meets management and business challenges.”