Ever the optimists, it seems bankers are expecting this year’s bonuses to be higher than ever.
The latest survey by recruitment firm Morgan McKinley suggests 93% of City financial services employees expect this year’s bonus to be higher than or the same as last year’s, and that 25% expect at least double what they received in 2005.
Avid readers of eFinancialCareers.com can be forgiven a sense of déjà vu – last year Morgan McKinley asked bankers the same question and elicited positive expectations from 75% of them, with 25% expecting pay to double.
Unfortunately, optimism is no guarantee of success. By February 2005, when Morgan McKinley asked bankers to comment retrospectively on payouts, only 60% of respondents said they’d received more than the previous year and only 10% had achieved the much vaunted doubling.
Robert Thesiger, chief executive of Morgan McKinley, says bankers are in danger of over-egging the bonus pudding for the second year running. “When it comes to bonus expectations, the human brain seems to go hand in hand with employers’ results – people see that a bank’s profits are up 80% and immediately assume their bonus will be too.”
In fact, Thesiger predicts only top performers will see any appreciable rise and that banks need to prepare people for this reality: “Expectation management is going to be a much bigger issue this year than previously.”
Banks that mismanage expectations could have problems on their hands: 75% of Morgan McKinley’s respondents said they’d look for a new job if their bonus wasn’t up to scratch.