2015 - 2016 Compensation · Our annual review of City compensation trends during 2015 and the...

£2015 - 2016Compensation

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1. IntroductionOur annual review of City compensation trends during 2015 and the outlook for 2016.

Our 2015 compensation report looks at the changing pay and bonuses on offer to people working in the city. This year, we also look at the benefits available and their importance when looking for a new role.

All of the research for this year’s report was undertaken by online survey between 8th September and 13th October 2015. Requests to participate in the survey were sent to 35,595 candidates and clients of Astbury Marsden. A total of 1,063 responses were received and analysed to compile all of the data for the final report. The information and data contained in this report are for information purposes only and are not intended, nor implied to be a substitute for professional advice. In no event will Astbury Marsden be liable to you or any third party for any decision made or action taken in reliance of the results obtained through the use of the information and/or data contained or provided herein. Please consider that the responses given are based on the respondents interpretation of the question and response options. If you have questions regarding the survey or the report please contact: Adam Jackson+44 (0)20 7065 [email protected]

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2 . Summary of findingsThe most significant insights and trends identified in this year’s research.

As the economy adjusts to a period of growth, we see companies fighting for the top talent to move their business forward. An important part of this, is offering competitive compensation packages to attract and retain the best people. In our latest report, we look at how businesses have adjusted pay, bonuses and benefits to compete in the market and how content employees are with their compensation package.

Base Salary

At the salary level, we saw the average base rise by 8% this year to £92,669 with median basic pay 7% higher, at £83,000. This increase, suggests continued confidence in business performance.

However, whilst the City as a whole is looking positive, the battle for equal pay for women is still on. When looking at the differences in men and women’s salaries, we found that on average, women’s basic salary is just 81% of their male colleagues. However, this year, women are receiving a higher pay rise when changing jobs or receiving a promotion, last year, men saw their pay rise more quickly.

Bonus Expectations

Expectations of receiving a bonus are slightly lower this year with 64% anticipating receiving a payment, a 2% decrease on last year. Of these, 35% are expecting to see a rise; 5% less than last year. However, there has also been a small reduction in those who expect to see their bonus drop. The results demonstrate an increased confidence in the market and candidate’s expectations.

When looking at overall satisfaction with remuneration, over one third (35%) are satisfied with their package, with a further 7% who are very satisifed. Just 23% are dissatisfied or very dissatisfied. This suggests that employees are comfortable about the remuneration they are receiving.

Next Year

When looking at next year’s pay, respondents are becoming slightly more positive, with 2% more than last year expecting their pay to go up. However when looking on a job level basis, the report shows that the more senior the respondent, the less confident

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they are about receiving a pay rise. The most confident are at the AVP/Manager level with 60% expecting to receive a pay increase. By stark contrast, just 37% of Managing Director/Partner level employees think they will see their salary increase in 2016.

But what if expectations are not met? How will employees react? This year, 61% of respondents said they would move roles if they were not happy with their overall compensation, this is compared to just over half who said they would make the move last year. This suggests that city workers are becoming increasingly more confident in the job market than they have been in previous years. With 23% who are dissatisfied with their current remuneration, we could see some movement in the market if employers do not meet expectations.

Benefits

Money is not the only reward for employees. Companies now provide a diverse range of benefits from the traditional paid holiday, private health insurance and pension contributions to more modern benefits such as sabbaticals and flexible working. Over half of city workers (56%) think that flexible working is very important or vital when looking for a new role. However, only 42% are offered it as a benefit. This could be a win for companies who are looking to attract new employees from their competitors.

I hope you find the report interesting.

Adam JacksonManaging Director - Europe

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3 . Basic Pay

This year, the average salary in the City is £92,669, an 8% increase on 2014. The median basic pay is £83,000, a 7% increase on last year.

In line with last year, 62% of respondents have seen an increase in pay this year and less than 3% have had a decrease.

Exploring changes to employee’s base salary over the last year.

OverviewFig 3.1

Changes to basic pay 2015 2014 2013 2012 2011

Respondents receiving an increase 61.9% 61.8% 47.0% 45.2% 44.0%

Respondents receiving a decrease 2.7% 2.9% 3.1% 3.6% 1.2%

3.1.1 Recipients of pay changes

Increases in pay were made up of the following:

• 23% of respondents were promoted during the year. (Fig 3.1.2). Those promoted received nearly a 20% increase in basic pay, a rise on the prior year.

• 32% of city staff changed jobs (Fig 3.1.3), 8% more than last year. By changing employers you could expect to receive a 19% increase to your pay. This represents a rise on 2014.

• Just over 10% of respondents changed jobs and received a promotion and in return received on average 26% increase in pay, slightly less than last year.

• 55% of employees neither changed employers nor were promoted, these staff saw their basic pay rise by 4%, less than last year.

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3.1.2 Changes to pay as a result of promotion

3.1.3 Changes to pay as a result of changing employers

Average of 15.4% increase for those

who were promoted


who were not

Average of 13.5% increase for those who changed jobs


who did not

“The average salary across the City in 2015 was £92,699”


who were promoted


who were not



who did not



who did not


who were promoted


who were not

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Drilling into the results and looking at average pay differences based on job level we see the following:

Female MaleFemale salary as a %

of males

Analyst/Executive £54,849 £61,151 89.7%

AVP/Manager £63,898 £72,282 88.4%

ViP/Senior Manager £84,342 £100,167 93.1%

Director/Executive Director £121,422 £130,429 93.1%

Managing Director/Partner £178,333 £161,672 110.3%

Other £67,625 £105,887 63.9%

GenderFig 3.2

3.2.1 Impact on pay of changes in circumstance

Women changing jobs or receiving promotions saw their pay rise more quickly than men. There was very little difference when they decided to stay in their current role with the same employer.

GenderChanged Jobs

2015Promoted

2015No Change

2015

Female 22.7% 21.4% 3.5%

Male 17.1% 18.5% 3.7%

3.2.2 Pay equality

According to the survey, women earn 81% of the average basic salary for men.

This is a 3% decrease on last year. There is clearly still some way to go before women and men’s earnings are equal.

Average Median

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Job LevelFig 3.3

Job level

Impact on pay

Changed jobs Promoted No change

2015 2014 2015 2014 2015 2014

Analyst/Executive 18.7% 18.0% 22.3% 16.5% 3.8% 7.3%

AVP/Manager 19.5% 18.4% 20.9% 18.4% 4.4% 3.9%

VP/Senior Manager 25.7% 14.5% 20.4% 14.5% 3.5% 3.8%

Director/Executive Director 11.2% 17.9% 12.9% 25.1% 3.9% 3.7%

Managing Director/Partner 26.6% 19.1% 20.0% 26.1% 1.1% 5.9%

Other 10.8% 15.7% 15.3% 16.1% 3.3% 7.1%

3.3.1 Impact on pay of changes in circumstance

When changing jobs, Managing Director/Partner level staff expect to see the largest increases in basic pay. This contrasts significantly with the increases experienced by just one level below. Director/Executive Director staff who were promoted or changed jobs; received the smallest increases of any level.

Promotions at the Analyst/Executive level were the most fruitful but those at the most senior end received the lowest increases without a promotion or a job change.

Job levelMedian salary Average salary

2015 2014 Variance 2015 2014 Variance

Analyst/Executive £51,407 £47,000 9.4% £59,418 £54,302 9.4%

AVP/Manager £66,000 £61,000 8.2% £70,624 £64,698 9.2%

VP/Senior Manager £90,000 £84,000 7.1% £97,062 £89,783 8.1%

Director/Executive Director £130,000 £125,000 4.0% £129,407 £122,821 5.4%

Managing Director/Partner £150,000 £140,000 7.1% £163,100 £150,614 8.3%

Other £100,000 £94,000 6.4% £99,765 £92,545 7.8%

3.3.2 Shifts in median and average salaries

Median and average pay for Analyst/Executive level staff grew the fastest in the year with an increase of 9% for both. On an average basis, Director/Executive Director level pay was the slowest rising by 5%.

Average and median salaries increased across all job levels this year.

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FunctionFig 3.4

3.4.1 Impact on pay of changes in circumstances

This year, staff working in operations & middle office experienced the largest increases in pay as a result of changing jobs. Those in administration received the highest increase for a promotion, shortly followed by operations & middle office staff.

Internal audit staff received over 6% more pay without changing jobs or being promoted. This demonstrates the continued demand for the skillset, with employers providing increases in pay to retain their talent.

Function

Impact on pay

Changed jobs Promoted No change

2015 2014 2015 2014 2015 2014

Administration 0.6% 18.1% 57.1% 30.0% - 5.9%

Compliance 12.7% 36.9% 12.4% 32.2% 3.0% 3.7%

Finance 10.3% 11.2% 16.3% 10.8% 3.1% 2.8%

HR 12.1% 23.4% 12.9% 12.7% 5.3% 2.6%

Internal Audit 11.4% 20.8% 23.5% 0.0% 6.2% 4.4%

Operations & Middle Office

30.4% 19.9% 28.6% 24.4% 2.8% 4.1%

Revenue Generator

22.1% 2.3% 23.8% 7.0% 4.8% 15.1%

Risk & Governance

21.0% 14.2% 21.9% 17.4% 3.5% 3.6%

Sales & Distribution

3.8% 13.8% 2.1% 14.8% 4.5% 14.1%

Strategy & Change 27.3% 21.1% 11.6% 18.5% 4.5% 4.1%

Technology 16.1% 12.6% 19.3% 23.4% 3.2% 3.2%

Other 25.3% 19.7% 30.1% 28.1% 4.3% 4.4%

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FunctionMedian salary Average salary


Administration £80,000 £80,000 0.0% £64,667 £60,333 7.2%

Compliance £84,000 £77,500 8.4% £88,721 £84,933 4.5%

Finance £78,500 £75,000 4.7% £80,612 £75,544 6.7%

HR £69,250 £66,000 4.9% £80,450 £75,679 6.3%

Internal Audit £90,000 £75,000 20.0% £132,400 £114,900 15.2%

Operations & Middle Office

£70,000 £60,000 16.7% £73,309 £67,040 9.4%

Revenue Generator

£93,250 £92,614 0.7% £111,397 £102,691 8.5%

Risk & Governance £81,000 £78,000 3.8% £95,147 £87,363 8.9%

Sales & Distribution £87,500 £80,000 9.4% £85,614 £81,568 5.0%

Strategy & Change £100,000 £95,000 5.3% £106,127 £98,433 7.8%

Technology £90,000 £84,000 7.1% £93,843 £88,363 6.2%

Other £80,000 £66,000 21.2% £87,180 £77,822 12.0%

3.4.2 Shifts in median and average salary

For the second year running, internal audit staff saw their median income rise the fastest at a rate of 20%. This shows a continued demand for the skillset.

In contrast, revenue generators and administration functions saw little or no change in their median salary this year.

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SectorFig 3.5

3.5.1 Impact on pay and changes in circumstances

On a sector level there were some stark contrasts. The greatest impact on pay for those changing jobs in 2015 was experienced by payments, clearing, custody and counterparty staff who received a 46% increase. However, when being promoted, these staff earnt the lowest increases - just 4%.

Employees in private equity received a 40% increase in pay on promotion, almost 4 times what they received last year. For those who remained loyal to their employer, without a promotion or a job change, the highest increase in pay was in ratings agencies. Private equity employees received a 1.3% decrease with job change or promotion.

SectorChanged jobs Promoted No change

2015 2014 2015 2014 2015 2014

Commodity Trading 7.5% 5.7% 18.2% 10.7% 3.5% 10.4%

Consulting 36.5% 13.2% 25.1% 13.1% 5.0% 4.5%

Corporate Broking &Stockbroking

16.5% 42.9% 13.3% 42.9% 2.7% 0.0%

Exchanges & Trading Platforms

9.0% 25.6% 21.7% 34.1% 2.8% 3.6%

Fund Services 5.2% 15.9% 33.7% 8.6% 4.0% 4.7%

Insurance 17.9% 12.2% 22.6% 19.7% 4.6% 5.4%

Investment Banking 18.5% 22.3% 21.1% 22.6% 2.9% 6.2%

Investment Management 5.8% 8.6% 4.8% 12.0% 3.2% 4.9%

Non Financial Services 12.9% 18.6% 10.0% 31.7% 3.6% 1.5%

Payments, Clearing, Custody & Counterparty

46.4% 10.8% 3.8% 21.7% 0.7% 1.8%

Private Banking & Wealth Management

12.9% 27.3% 16.1% 7.2% 2.0% 3.4%

Private Equity 15.8% -6.9% 40.0% 10.9% -1.3% 5.6%

Ratings Agencies - 83.1% - 21.0% 14.0% 2.9%

Regulators 12.6% 15.2% 17.1% - 11.5% 1.7%

Retail Banks & Building Societies

12.6% 7.0% 19.0% 14.3% 2.8% 3.3%

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SectorMedian salary Average salary


Commodity Trading £75,000 £62,000 21.0% £84,443 £79,895 5.7%

Consulting £84,000 £80,000 5.0% £95,498 £86,617 10.3%


£78,000 £67,000 16.4% £102,000 £92,857 9.8%


£81,000 £76,500 5.9% £79,725 £74,190 7.5%

Fund Services £66,000 £64,600 2.2% £80,423 £73,711 9.1%

Insurance £85,000 £80,000 6.3% £86,068 £79,867 7.8%

Investment Banking £86,250 £80,000 7.8% £97,605 £90,799 7.5%

Investment Management £79,600 £75,000 6.1% £82,180 £79,622 3.2%

Non Financial Services £75,000 £65,000 15.4% £85,347 £78,534 8.7%


£80,000 £65,000 23.1% £89,250 £80,133 11.4%


£96,000 £94,000 2.1% £99,100 £94,600 4.8%

Private Equity £117,000 £105,000 11.4% £145,750 £139,900 4.2%

Ratings Agencies £71,500 £62,900 13.7% £71,500 £62,900 13.7%

Regulators £80,000 £60,000 33.3% £80,327 £73,468 9.3%


£81,000 £78,000 3.8% £89,903 £84,542 6.3%

3.5.2 Shifts in median and average salaries

For the third year in a row, median pay for regulators grew the sharpest in the year rising by one third (33%), followed by payments, clearing, custody and counterparty where pay rose by 23%. Ratings agencies saw average pay grow by 14% with the lowest growth seen for investment management.

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4 . Bonus ExpectationsA look at sentiment towards bonus payments for the current year.

OverviewFig 4.1

4.1.1 Overall bonus expectations

Overall bonus expectations have slightly decreased this year with 64% expecting a bonus - a 2% decrease on last year.

4.1.2 Expectation of change in bonus

This year, over one third (35%) of respondents are expecting an increase in their bonus compared to 40% last year. An equal amount are not expecting to see any change to their bonus. However, 13% are expecting a decrease - 3% less than last year.

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GenderFig 4.2

Despite both sexes expecting a small increase in their bonus, for the second year running, the average expected bonus for men is almost double that which is expected by women. The bonus as a percentage of average salary has slightly decreased for both sexes.

Gender2015 2014

Average bonus

% Average salary

% Expecting a bonus

Average bonus

% Average salary

Female £16,241 20.8% 60.8% £15,857 22.0%

Male £32,839 34.1% 65.1% £31,305 35.0%

Prefer not to say £66,000 79.3% 60.0% £52,333 75.0%

TOTAL £29,982 32.4% 64.3% £28,518 33.2%

Job LevelFig 4.3

Job level2015 2014

Average bonus

% Average salary

% Expecting a bonus

Average bonus

% Average salary

Analyst/Executive £6,261 10.5% 68.6% £5,843 10.8%

AVP/Manager £11,727 16.6% 85.5% £9,338 14.4%

ViP/Senior Manager £20,185 20.8% 81.4% £18,302 20.4%

Director/Executive Director £47,195 36.5% 85.5% £46,670 38.0%

Managing Director/Partner £99,985 61.3% 76.5% £94,640 62.8%

Other £9,540 9.6% 46.0% £9,900 10.7%

TOTAL

In line with the last two years, bonus expectations rose for all levels. As expected, Managing Director/Partner level staff expected the highest bonus at an average of £99,985, a huge 61% of average salary.

Female Male Percentage

Analyst/Executive £2,328 £7,713 30.2%

AVP/Manager £9,168 £12,079 75.9%

VP/Senior Manager £12,336 £22,160 55.7%

Director/Executive Director £25,806 £50,297 51.3%

Managing Director/Partner £71,667 £102,726 69.8%

Other £4,750 £10,452 45.4%

TOTAL £11,811 £25,832 45.7%

Looking at the comparatives based on gender and job level, the biggest disparity in bonuses is found at the lowest level - Analyst/Executive with women expecting just 30% of the bonus men are expecting to receive.

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FunctionFig 4.4

Function2015 2014

Average bonus

% Average salary

% Expecting a bonus

Average bonus

% Average salary

Administration £7,500 11.6% 50.0% £7,750 12.8%

Compliance £18,819 21.2% 82.5% £18,618 21.9%

Finance £17,403 21.6% 74.0% £16,638 22.0%

HR £11,659 14.5% 79.2% £12,000 15.9%

Internal Audit £55,929 42.2% 85.7% £59,179 51.5%

Operations & Middle Office £11,923 16.3% 75.8% £10,858 16.2%

Revenue Generator £90,308 81.1% 95.8% £81,631 79.5%

Risk & Governance £18,775 19.7% 79.2% £16,325 18.7%

Sales & Distribution £31,205 36.4% 95.5% £24,500 30.0%

Strategy & Change £23,673 22.3% 78.5% £19,390 19.7%

Technology £12,487 13.3% 67.3% £14,666 16.6%

Other £21,849 25.1% 81.3% £18,794 24.1%

TOTAL £23,196 25.0% 77.4% £21,726 25.3%

Bonus expectations as a proportion of pay were fairly consistent across most functions when compared to last year.

The highest proportions were found with Revenue Generators who expect to receive 81% of their salary as bonus, a slight increase on last year. Those in administration and technology have the lowest expectations at just 12% and 13% respectively.

Over 95% of revenue generator and sales and distribution professionals expect to receive a bonus compared to 67% of technology staff.

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SectorFig 4.5

Sector

2015 2014

Average bonus

% Average salary

% Expecting a bonus

Average bonus

% Average salary

Commodity Trading £26,939 31.9% 95.2% £21,451 26.8%

Consulting £18,909 19.8% 74.4% £17,416 20.1%


£27,071 26.5% 85.7% £29,536 31.8%


£15,025 18.8% 95.0% £14,540 19.6%

Fund Services £12,156 15.1% 68.8% £11,469 15.6%

Insurance £16,789 19.5% 80.7% £14,804 18.5%

Investment Banking £24,461 25.1% 76.6% £22,160 24.4%

Investment Management £27,525 33.5% 90.7% £23,220 29.2%

Non Financial Services £10,710 12.5% 35.9% £9,865 12.6%


£22,083 24.7% 66.7% £22,792 28.4%


£59,196 59.7% 78.3% £55,533 58.7%

Private Equity £104,125 71.4% 80.0% £144,350 103.2%

Ratings Agencies £3,756 5.3% 100.0% £3,750 6.0%

Regulators £13,273 16.5% 81.8% £10,164 13.8%


£19,162 21.3% 64.9% £17,003 20.1%

TOTAL £23,196 25.0% 77.4% £21,726 25.3%

In line with last year, the highest bonus expectations were held by staff working in Private Equity at £104,125. The lowest expectations are with ratings agencies and non financial services.

In addition, nearly all (95%) exchanges and trading platforms employees are expecting to receive a bonus compared to just over one third (36%) of non financial services.

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5 . Expectations & ReactionsThe sentiment of City staff towards pay prospects for 2016.

OverviewFig 5.1

GenderFig 5.2

Over half of respondents this year (51%), believe that they will receive a pay increase in 2016. This is a further small rise on last year’s findings.

Both men and women have similar expectations towards pay increases in 2016, however, this year men are slightly more optimistic than women.

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Job LevelFig 5.3

There is a stark contrast between different job levels in terms of expecting a pay increase. 60% of AVP/Manager level staff expect a pay rise in 2016, compared to just 37% of Managing Director/Partner level employees.

FunctionFig 5.4

Internal audit staff were the least optimistic about pay prospects for the coming year. This is surprising given the increases in base salary they have experienced over the year (Fig 3.4). HR and revenue generating staff are the most optimistic.

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SectorFig 5.5

Regulator employees are by far the most optimistic with 91% expecting to receive a pay rise over the next year. This is followed by 67% of ratings agencies.

Private equity and payments, clearing, custody and counterparty expect continued pay pressure in the coming year.

Total RemunerationFig 5.6

When looking at total remuneration, the majority of respondents are satisfied (35%) with their package with 7% who are very satisfied. Just under a quarter (23%) are dissatisfied or very dissatisfied.

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DissatisfactionFig 5.7

5.7.1 Action taken if dissatisfied with overall compensation This year we have seen a further increase in those who would change roles as a result of a poor salary and bonus with 61% who would make a move.

Employees are less interested in moving overseas when compared to last year, but this has not quite dropped to the levels experienced in 2013.

This year, there has been a drop in the proportion of people who would not take any action if they were dissappointed with their compensation package. Employees are placing more importance on their pay than they did last year, and as a result, they will speak up if they are not receiving what they feel they deserve.

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6 . BenefitsLooking at the benefits available to City employees and their importance when looking for a new role.

Benefits ReceivedFig 6.1

Not surprisingly, 80% of respondents receive 25 days holiday or more. With the introduction of automatic enrolment for pensions we have also seen nearly three quarters (72%) receiving a pension.

At the other end of the scale, just 11% receive subsidised or free meals and 14% receive a sabbatical.

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Importance of BenefitsFig 6.2

Benefit Not importantQuite

importantVery

importantVital

25 days’ holiday or more 5.6% 12.1% 33.3% 49.0%

Annual bonus scheme 6.7% 14.7% 37.0% 41.7%

Car allowance 66.8% 15.8% 13.7% 3.7%

Childcare 64.6% 19.5% 10.9% 5.0%

Company pension 9.2% 11.9% 32.4% 46.5%

Cycle to work 77.8% 15.9% 5.0% 1.2%

Flexible benefits 24.1% 34.2% 30.4% 11.2%

Flexible working 15.7% 28.0% 36.0% 20.3%

Support with training 19.0% 33.7% 35.0% 12.3%

Gym 50.2% 29.7% 17.2% 3.0%

Insurance 11.6% 23.0% 36.5% 28.9%

Private healthcare or dental care 10.7% 18.0% 41.7% 29.5%

Sabbatical 51.1% 29.8% 15.9% 3.2%

Season ticket 57.2% 22.7% 14.1% 5.9%

Share incentive 32.6% 31.8% 27.0% 8.6%

Smart phone, laptop or tablet 48.5% 22.6% 18.0% 10.8%

Subsidised or free meals 58.7% 25.8% 12.5% 3.0%

Over half (56%) of respondents say that flexible working is very important or vital when looking for a new position, however, only 42% are able to actually take advantage of flexible working. This could be an easy way for city employers to improve employee retention and attract new hires.

On the other hand, businesses often focus on providing extensive support with training and development, however, less than half of respondents think that support with training is ‘vital’ or ‘very important’ when looking for a new role.

In addition, over one third (34%) of respondents receive childcare vouchers, whilst only 5% believe this is vital.

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Astbury MarsdenWe specialise in recruiting uniquely talented people in business technology, business transformation, regulatory and assurance functions and specialist technical skills. We intimately understand the dynamics of the financial services, energy and professional services markets; making sure we know the people our clients need to occupy critical roles throughout their business. We help clients determine the people they need and then we find the best of them.

We have a global perspective and we are territory-neutral. We look for market identifiers that we recognise, and apply our experience and intelligence to solve the challenges they face. Our regional hubs established in London and Singapore allow us to serve our clients across EMEA and throughout Asia.

You can find more out at www.astburymarsden.com

Singapore

Mark O’Reilly65 Chulia Street, OCBC Centre, #43-01 Singapore 049513+65 6829 7122

London

Adam Jackson33 Cannon StreetLondon EC4M 5SB+44 (0)20 7065 1222

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2015 - 2016 Compensation · Our annual review of City compensation trends during 2015 and the...

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