The bonus dilemma

 

Bonus has always been the compensation every employee lies in wait for. However, sometimes the reality doesn’t meet the expectations. In this exclusive interview, James Randall, Sales Manager - Middle East, eFinancialCareers talks about the reasons behind bonus and salary increase for financial professionals in the Middle East.

 

Please tell us about the status of financial professionals in the Middle East in terms of employment, salaries, and bonuses?
Our recent survey for bonuses shows a trend of employees Vs employers being significantly out of sync; with nearly half (45%) of respondents saying their bonus failed to meet their expectations. This is despite the fact that 49% claimed to have received a bonus uplift on 2013. Nearly 60% of the respondents said they would be looking to leave their current employer which could be following dissatisfaction with their variable remuneration. In a Bonus expectation survey eFinancialCareers ran end of last year, 65% of the respondents claimed that they might seek new opportunities if they would not get satisfactory bonus.

Why are these employees unsatisfied with their annual bonuses?
One of the reasons of their disappointment may be the size of their bonuses compared to their peers in other large financial centers and hence feel they are underpaid. Our research suggests that the average bonus in London was $96K, $72k in the U.S and $33k in Hong Kong whereas average bonuses across the region were $23k. The flagship economies of the Middle East are also brimming with confidence and employees reading the positive headlines will begin to reevaluate their expectations from the recessionary days in terms of what they feel is fair. As a result, employers who believe they can ride the crest of the wave without increasing staff costs will not only lose current employees but struggle to find the right replacements.

 

Are they taking any action to change this situation?

Compensation is by far the most important and motivating incentive for employees. Thus, until we run the same survey next year it will be hard to tell if the banking industry has taken heed. In the meantime, employers need to manage expectations in the beginning and be transparent with staff about the level of performance required for a satisfactory bonus.

What are the main reasons for a salary/bonus increase that companies rely on in the region? What would be the mains reason for a decrease?
 

The reasons are not so much related to the region as they are to the job title. For example, the bonus of a front office personnel might depend on the company’s performance whilst fee earners will be awarded on their personal performance. This is back up by a research we conducted in Q4 2013, whereby 41% of bankers cited personal performance for the main reason they will receive a bonus increase. In the same survey 46% claim the level of their bonus very much affects their job satisfaction and motivation at work.

Could you please share with us some statistics about the average annual bonus in the UAE and some other countries?
 

Table 1: Self-reported change in bonus size, 2013
 

                  ME UK US HK SG

 

Increased 50% 49% 47% 47% 42%

 

Decreased 22% 18% 17% 16% 18%

 

Same          22% 21% 24% 24% 28%

 

A bonus was not part of their 2012 compensation 7% 13% 11% 13% 12%

 

Please note total may not add up to 100 due to rounding

 

Table 2: Bonus vs. Expectations, 2013

 

                                          ME UK US SG HK

 

Exceeded expectations 9% 13% 10% 12% 13%

 

Met expectations            38% 39% 38% 33% 37%

 

Beneath expectations       45% 41% 38% 42% 33%

 

I had no expectations        7% 8% 14% 13% 17%

 

Please note total may not add up to 100 due to rounding

About James Randall:
 

James Randall is Sales Manager - Middle East at eFinancialCareers. He started his career in sales with Xerox. His Middle East experience started in 2008 when he was involved in setting up an office in Dubai for an International recruitment firm. Since then he has developed a thorough understanding of the finance sector and recruitment in particular across the Gulf markets. He has been with eFinancialcareers for the past 2 years where his experience has been instrumental in building on their Middle East success. James is a graduate in Computer Science from Newcastle University.

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