Shrinking pay packets are the primary sources of stress in the banking sector as financial professionals face longer hours and unachievable deadlines without the prospect of a big bonus at the end of it all.
An average of 68% of the 3,400 banking professionals in the UK, US, Middle East, France and Germany responding to an eFinancialCareers survey on stress in the workplace said that they felt underpaid. With the exception of Wall Street bankers, the majority of respondents also said that they had seen an increase in stress levels during the last six months – 57% in the UK, and 63% in France, for example – and a lack of monetary reward was by far the biggest reason cited for this.
Bankers have, of course, been vilified for their bulging pay packets in recent years, and regulators across the world – but particularly in Europe – have been cracking down to limit bonuses and apply more punitive deferral schedules.
However, Philip Hodson, a psychologist who works with investment bankers, said that – as ridiculous as it may sound those outside the sector – smaller bonuses are a huge catalyst for stress: “There’s no counselling, no cuddling or back slapping in investment banks. The only time people ever know when they’ve done a good job is when they’ve been handed a bonus. Getting a smaller figure, particularly in reference to your colleagues, is a psychological slap in the face.”
Dissatisfaction with pay is highest on Wall Street and in the City, with 72% of respondents in both countries saying they were underpaid. Most bankers also complained of being over worked, with 71% of respondents in the UK and 60% in the US saying that they didn’t have enough hours in the day to do everything they wanted to.
Jon Terry, head of compensation and benefits at PwC, believes that banks have traditionally focused too much on pay to keep staff happy, and this needs to change: “The main reason that people would work really hard for banks is because they were paid a tremendous amount of money for doing so. Compensation is lower, and will continue to shrink, so banks need to change how they motivate people. However, with all the cost-cutting currently, training and development programmes and other HR functions are also being scaled back.”
Banks are, at least, taking steps to address stress in the workplace, believes Cary Cooper, professor of organisational psychology at Lancaster University Management School and founder of Robertson Cooper, which works with investment banks on employee mental health.
“Banks are worried, because the bottom line is that key people will leave if they’re stressed out. There’s no point sending someone around massaging people at their desks or starting meditation classes. They need to find the various roots of the problem among their different employees,” he said.
This means that investment banks are increasingly carrying out “well-being audits” he said, identifying the source of stress, whether that’s an autocratic manager or overly long hours for reduced rewards. Solutions include “resilience training” to help instil mental toughness in their employees or more flexible working, he said.
There’s a stereotype that investment bankers are big drinkers, or more susceptible to substance abuse, and that this spikes during periods of mass layoffs.
However, respondents to our survey suggest a decidedly healthier way to unwind. Playing sports or exercising was the number one way to manage stress in the US and Germany as well as featuring in the top three within the other countries included in the survey. Spending time with family was also another popular way to relieve work problems. Yoga or meditation didn’t feature highly.
Interestingly, when asked to outline other ways to distress, a number of U.S. bankers said that they went to church or prayed. Only bankers in the Middle East also turned to religion with praying and seeking help from Allah featuring as methods to alleviate workplace stress.
In the UK, as well as exercise and spending time with family, bankers suggested that escaping the city for a country locale was a good way to relax.