Times are tight. If you work in banking and you want a pay increase, recruiters say there is really only one way of securing one: you'll need to threaten to leave. And then you'll need to hope that your employer likes you enough to buy you back again.
"It's become incredibly common for banks to make counter-offers," says Zaki Ahmed, founder of specialist equity research headhunting firm Financial Search. "As a result, a lot of people are interviewing just to be bid back. Nowadays a counter-offer is one of the only ways a bank can justify an increase in pay."
How much can you expect your pay to be increased by when you threaten to leave? In London, you can expect 10%, to match the 10% rise you can command in a new role, says Ahmed. The days of 25% pay hikes for changing jobs in the City are over.
On Wall Street, Jeanne Branthover, financial services practice leader at Boyden Executive Search in New York, says front office banking candidates can still achieve 20% pay increases by switching firms. By comparison, she says internal promotions only bring pay increases of 3-5%. US candidates therefore also have an incentive to threaten to leave in the hope of eliciting a buyback.
Needless to say, there are good reasons not to strong-arm your boss into increasing your pay. "If you accept a counter-offer, your firm will never trust you 100% in future," says Branthover. "You looked for a new job without them knowing and they had to do something to keep you.
If it takes announcing that you're leaving to get an increase in pay, you shouldn't be staying," Branthover adds.
Ahmed says the eruption in candidates who are simply trying for a counter-offer is irksome to recruiters: "If clients spend time with candidates who are interviewing simply to get a pay uplift at their current house, they will feel understandably frustrated.” As a result, he says headhunters' time is increasingly spent trying to sniff out candidates who are only feigning interest in new roles. Those found guilty are liable to be blacklisted.
However, Branthover says there's one set of circumstances in which accepting a counter-offer might be a good idea. "When the company comes back with more money and the promise of a new position internally which has never been on the table before, accepting a counteroffer might be worthwhile," she says. "But if you accept a counteroffer that's just based on the money, you will often leave within a year. More money won't cure whatever was making you unhappy in your current job."