Bonus optimism amongst Bankers despite market uncertainty

New research released today by financial recruitment specialist Martin Ward Anderson, indicates a surprisingly optimistic outlook to anticipated bonus payments in 2007 amongst City employees.

Even though this poll was taken in the midst of the asset write-downs and job loss announcements, overall 30.9% of respondents felt that their 2007 bonus would be bigger than that paid last year. 38.4% thought it would be less, 17.6% said they felt it would be the same, whilst 13.1% said they simply had no idea.

Unsurprisingly, front office employees are anticipating the biggest payouts with 61.9% believing their bonuses would either be higher or the same as last year. Conversely, middle office employees are amongst the most pessimistic with 53.3% believing it would be significantly less. Back office employees appear to remain reticent with around one third believing that their bonuses would either be the same as last year or preferring not to give an opinion one way or the other.

When compared with the same bonus satisfaction poll conducted in 2006, the 2007 results indicate that city employees perceive this yearsí performance as stronger than the last. In 2006 just under half of all city employees surveyed (46.6%) stated they were unsatisfied with the amount they received in their bonus package.

Commenting on the results, Martin Ward Anderson Director, Caroline Hudson says ìWhilst we are slightly surprised by how optimistic the City remains in light of the current economic climate we must remember that market conditions within the banking and financial services sector have been relatively buoyant up to September of this year. This optimism is not yet being directly reflected however in the current recruitment market. Very few organisations are guaranteeing bonuses or offering sign-on incentives, which you do experience more at this time of year historically. From a candidate perspective we have not seen a noticeable increase in numbers registering and so we are concluding from this that the majority are playing a waiting game until the actual figures are announced at the end of the year.î

She continues, ìIt is good to see a high level of optimism in the City given that London remains at the forefront of expansion and diversification strategies for the global banking community so heavily exposed in the US.î

Concluding on the subject, Hudson speculates whether this optimism is misplaced and whether we are likely to see a mass exodus of City employees in the new year; either through bonus dissatisfaction or because nearly 30% of banking and finance sector employees reported being generally dissatisfied in their current jobs.*

The regional analysis shows the Americas predicting the smallest payouts in 2007 (47.8%), with EMEA and Asia Pacific showing similar trends but at a less extreme level (36.4% and 32.2% respectively). This generally highlights the continued reliance on growth across EMEA and Asia Pacific as they persistently demonstrate their importance as evolving markets.

The individual firm results also indicate lower levels of optimism within US houses, which is of no surprise to Hudson. In particular Bank of America, JP Morgan and Merrill Lynch all scored high when it came to employees expectations for smaller payouts. WestLB, UBS and Fortis also fell into this category. The most optimistic employees came from Goldman Sachs, Deutsche Bank, ABN Amro and Dresdner Kleinwort.

The survey was conducted on just over 3102 City employees in September and October 2007. We will be conducting a follow up poll on actual bonus satisfaction in Q1 2008.

* Job Satisfaction Survey September 2007 conducted on 3656 banking and finance sector employees.