City faces losing millennials amid bonus complaints

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Asset managers and City firms face losing millennial workers as they are unhappy with bonus payouts, new research finds.

The Morgan McKinley Bonus Survey 2016 found 39 per cent of respondents saw their bonus increase in the latest bonus season, 23 per cent saw it stay the same, and 26 per cent experienced a decrease. Eleven per cent did not receive a bonus at all.

However, the research of 350 respondents in banking, asset management, insurance and the Big Four accountancy firms, found there was a perception bonuses went to the “big boys” in the senior ranks of the organisation.

Millennials, who the industry has been trying to appeal to through promoting work/life balance and flexible working hours, were the most likely to feel dissatisfied with their bonus at 83 per cent.

Twenty five per cent of respondents said they were considering leaving their work due to their bonus, while 49 per cent said it would not influence their decision to stay or leave. Those who had been working for one or two years were most likely to be dissatisfied.

The report found 82 per cent of those questioned for the research said bonuses encouraged better performance.

However, the research pointed out that many respondents felt bonuses were insufficiently linked to individual performance, with just 14 per cent believing their own delivery had an impact on their bonus and 6 per cent thinking their bonus size was due to team performance.

The majority (62 per cent) said the size of their bonus was impacted by organisational performance, while 44 per cent said bonuses had been hit by cost cutting measures.

One respondent who was not in the front office said: “In good years, the pool is directed to sales and PMs to retain them, in bad years it is directed to sales and PMs to retain them.”

Last year the EBA capped banker bonuses at 100 per cent of pay or 200 per cent with shareholder approval, a move due to come into effect in 2017.

“The public may be happier that the days of controversial bonuses are over but it’s clear that the industry needs to do much more to make jobs in the city attractive,” said Hakan Enver, operations director at Morgan McKinley. 

“With 82 per cent of respondents suggesting they felt that bonuses encourage better performance, it’s clear that the sector has not yet found an enticing alternative to the entrenched bonus mindset.”