Do you want next year’s bonus ahead of time? Hiring banks are said to be increasingly willing to buy out the bonuses of the staff they’re hiring.
Given that US banks have only just paid out their bonuses, it may be a little early in the year for US bank employees to have their bonuses bought out for the whole of 2007. But if you work at the likes of Mitsubishi UFJ, which has yet to pay, now may be the time to make your move.
“An employee might have nine months of bonus accruing at one bank,” says Richard Parnell, the Asia-Pacific head of recruitment firm Robert Walters. “A new employer would rather not buy it out, but that’s what they’re having to do.”
The phenomenon is reportedly occurring in second-tier management and department heads and above, particularly at senior vice-president/director levels.
Parnell says he noticed the trend emerging towards the end of 2006, the first time he had seen it in any significant numbers since 1998/99 – the last time investment banks found themselves scrambling for staff.
Ian Wilson, executive director of Boyden Partners, says he too has noticed an increase in buyouts in recent months. “It hasn’t become standard, but it is becoming common.” His firm was recently involved in a financial services industry hiring where the candidate was paid a bonus equivalent to three times his annual salary.
“Clients can’t wait until after bonuses are paid,” he says. “It is a way of breaking the cycle.”