They’re nothing new in the northern hemisphere, but guaranteed bonuses are now available here too.
‘Guaranteed bonuses’ are when banks commit to paying a specified level of end-of-year bonus, rather than leaving it to your performance or the foibles of the market. From banks’ perspective, they’re a way of enticing scarce talent to come and work for them. Throwing in a guarantee can also prevent existing staff from leaving to work for competitors.
Caan Krsztew-Ivanow, of Melbourne-based recruiter Graeme Jones, says competition for staff means guarantees are popular: “Guaranteed bonuses are being used to retain staff; however, they are also being used to attract new staff to organisations that may not have the brand name or deal-flow size that other well-known firms have.”
Sign-on bonuses – or payouts to new employees – are also proliferating. Krsztew-Ivanow says this is partly to compensate for lost bonuses when people leave a previous employer: “Bonus structures [at some banks] are now split over two instalments rather than one. This means that people are less inclined to move on, as they may lose their financial entitlements.”
But don’t expect to pick up a guarantee or a sign-on if you’re a junior. Anthony Ayers, at recruiter Chandler Heath in Sydney, says the amount and tenure of the guaranteed bonuses (they’re normally one year, but can be more) are related to the quality and seniority of candidate – and the urgency of placement. In most cases, guarantees go to people at senior associate level or above.