UAE financial services firms will need to reconsider remuneration plans for their top professionals as bonuses lose their retention powers
- More than half (52%) of UAE financial services businesses said the number of employee resignations increased following last year’s bonus payout
- Recovery drives concerns about losing top performers to other job opportunities for majority (84%) of financial services companies
- Nearly one third (31%) of companies expect to pay higher bonuses in 2014
Dubai, 11 March, 2014 – UAE financial services firms will need to reconsider remuneration plans for their top professionals as the industry continues to rebuild and recover, according to research from Robert Half1 Middle East. More than a half (52%) of businesses surveyed admitted that the number of employee resignations increased following last year’s bonus payout, with only 15% saying that the number decreased, suggesting that bonuses were not sufficient to maintain staff retention.
The findings follow recent insight from the 2014 Robert Half Middle East Salary Guide, which revealed that financial services companies are paying competitively secure the best the market has on offer - creating an imbalance among staff whose remuneration has not kept pace and leading to retention fears.
The majority (84%) of financial services companies are also reporting that they are either ‘somewhat’ or ‘very’ concerned about losing top performers to other job opportunities in the year ahead.
This is likely to result in candidates feeling they can get more money elsewhere – an insight that is backed up by the fact that a high proportion of financial services candidates’ remuneration expectations have increased over the past 12 months. When asked how candidates’ remuneration expectations had changed compared to last year, nearly six in 10 (59%) said they had risen, while 22% said they had stayed the same with 19% saying they had decreased.
Some employers may already be taking note, according to Robert Half’s research. When asked how they expect their company’s remuneration for existing employees to change in the forthcoming year, nearly one third (31%) said they would increase the level of bonuses paid, while 63% said that the level of bonuses paid would remain static and 6% said they would reduce bonuses or offer no bonuses at all.
James Maidlow, Senior Manager, Robert Half Financial Services said: “Businesses need to be wary of the fact that there was a clear increase in the number of resignations made following last year’s bonus season. As the market starts to turn, the number of new job opportunities grows commensurately and it becomes more difficult to retain your top players. Attracting and retaining talent – both locally and from abroad – is clearly very important, so consulting industry resources, such as the Robert Half Salary Guide, will allow companies to benchmark compensation and reward competitively to secure the industry’s best.”
Robert Half advises financial services companies to follow the following five tips to retain key staff following the bonus payout:
1. Understand individual motivations for each member of staff: flexibility and work/life balance may be more important to one member of staff than another
2. Communicate with all staff clearly and regularly – ensure they understand the vision for the team/company and buy into it
3. Outline business achievement targets for the year ahead, how personal performance targets feed into that and will be rewarded in the form of bonuses in 2015
4. Make sure that key players are getting the roles and responsibilities that motivate them – a rewarding environment is not just about the money that individuals earn
5. Recognise that a recovery tends to lead to a ‘seller’s market’ in terms of senior roles – consider upping the ante for salaries and bonuses paid to your top 10% of people.
About the Survey
1The survey was conducted by an independent research firm and includes responses from 75 Chief Financial Officers and Chief Operations Officers at UAE financial services firms. The research was conducted in December 2013.
About Robert Half
Robert Half is the world’s first and largest specialised recruitment consultancy and member of the S&P 500. Founded in 1948, the company has over 345 offices worldwide, including Dubai, Abu Dhabi and Doha, offering permanent recruitment solutions for accounting and finance, financial services, technology, human resources and legal professionals. Robert Half offers workplace and job seeker resources at roberthalf.ae.