What Financial Services staff think about compensation

Salaries & bonuses in financial services

Salaries:

As most people are aware, working in the finance sector comes with generally high rewards. But at a cost: employees often report working incredibly long hours - possibly partly due to the variances in trading times between timezones - and this increases the expectation of higher pay. It’s also worth noting that there is some variation: not everyone is earning those top wages.

Unfortunately, that includes some striking pay disparity when it comes to gender. On average, women report earning £10,000 less than their male equivalents - with the ONS reporting that the pay gap rose in 2023. As always, even high-earning industries have their challenges when it comes to compensating fairly and competitively. So employers can’t be complacent.

Bonuses:

In finance, bonuses are a big deal. They make up a significant portion of total compensation for a lot of staff, and should be considered by employees and employers alike when thinking about pay. Again, it’s a nod to those long working hours we mentioned earlier - and these bonuses are likely linked to performance and outcomes too, meaning there’s all the more reason for employers to appreciate their importance.

However, on average, bonuses rose less than 5% in 2023 - pointing again to a disconnect between the cost-of-living crisis and what employees are being compensated.

What employees think about salaries & bonuses:

Case in point, research shows that - despite their generally high salaries - a large proportion of employees working in financial services are “deeply unsatisfied” with their pay - with 1 in 4 actually stating they feel underpaid. And certain roles in this sector were particularly unhappy, with an alarmingly low 13% satisfaction rate from those working in compliance.

Almost 60% of those unsatisfied with pay say it’s because it hasn’t risen with the cost of living. Which is a stark reminder to employers to be aware of the wider economic climate and subsequent changes to market rates, so they don’t fall behind on meeting employee expectations - or, rather, their financial needs.

There are variations in attitudes towards pay across other dimensions too: namely, between men and women. Only 44% of women expect to reach their desired salary level, compared to 57% of men - and this disparity is justified, with women actually being less likely to receive a rise. The general takeaway? Employees think about salaries, and are aware of the many factors at play - how they’re treated based on their demographics or role, the market rate, the state of the economy, and more. They take this all into account, so you should too.

Benefits in financial services

Employers are aware that their staff expect more than competitive salaries and considerable bonuses. As well as more generous pensions and other financial incentives, financial services organisations are increasingly focusing their efforts on wellbeing and mental health initiatives to improve retention - possibly, in part, due to the negative consequences of those long working hours.

It’s challenging, though. 46% of companies say it’s difficult to meet rising expectations for their employees - and there’s still a disparity in who does see benefits and perks, with women less likely to receive any. It’s important for organisations to prioritise their employee offerings by what they actually want, since they may not be able to cater to everyone’s preferences.

What employees think about benefits:

Unsurprisingly, research shows that salary is a major preoccupation - with 45% of staff desiring annual pay rises. But the next priority for most is a move towards flexible working, including major adjustments like a four-day working week - with women especially wanting to see flexi-time as an option.

This gives finance businesses an opportunity to compete. If you can compete in terms of compensation, do so - it’s a major driver. If you can’t? Then consider accommodations to working patterns, and a general lean towards being flexible. In an intense environment that necessitates long hours, some flexibility around when those hours are worked could help you to stay competitive and encourage wellbeing - without damaging productivity.

What’s the cost of not meeting employee expectations?

With almost half of organisations struggling to meet employee expectations, the question remains: what’s the damage of accepting that it’s not possible to do so? Well, as always, it comes down to employee retention. Over half of employees in the sector are job hunting, most citing pay, benefits, and workplace culture as contributing factors.

We all know the high price of employee retention. And in a money-minded sector, it’s important to remember that attrition costs you more in the long run - so finding ways to stay competitive when it comes to compensation and benefits is absolutely key.

We can help you make competitive compensation decisions

When employees care so much about compensation, it’s important to get it right. That means staying on top of market shifts, economic trends, and employee attitudes, so you can respond quickly and appropriately to. That means during your pay reviews, and outside of those set periods too - because the world won’t wait until your annual compensation process.

Our platform was built to help. It combines your HR and payroll data with highly relevant, up-to-date salary benchmarking - compiling and analysing it all together, so you can make sense of any gaps when it comes to compensating competitively.
With easy-to-understand dashboards, smart data downloads, board packs, and more, it’s an easier, faster (and let’s face it, cheaper!) way to get pay right. Try it now: