Financial services industry salaries expected to rise 5.5%

Salaries in the financial services sector are forecast to rise to 5.5% on average in 2008 across all levels, almost 1% higher than the general industry sector, according to a report released today.

Mercer’s Financial Services Remuneration Guide claims that the fund management industry is still experiencing some of the highest salary increases in the financial services sector.

Staff turnover across the industry is high at 15%, rising to 20% in some niche areas. In response to this high turnover, employee referral schemes are increasing, with many companies offering approximately €2,250 for each new employee introduction from their existing staff.

Mary McDermott, senior consultant with Mercer noted: “As a result of a buoyant labour market in the financial services sector, frequently newer recruits are being paid in excess of those with 2-3 years experience, particularly at administration and professional levels.

“This can raise significant concerns for companies in their attempts to maintain equitable compensation packages between existing staff and new joiners.”

Company employee benefits are increasing in the financial services sector. Employer paid maternity leave has increased to 26 weeks (less social welfare payments) largely driven by the recent changes in legislation.

Some companies apply minimum service criteria for entitlement to company maternity pay, or a minimum return period. VHI remains the most commonly reported provider.

The survey also indicated that employee assistance programmes - providing information and confidential counselling services to employees are also increasing.

Such programmes are typically offered to all employees, with five to eight sessions per employee, at an average cost of €48 per employee.

The average number of holidays offered to employees has increased to an average of 24 days, and up to 25 for executives.

Ms McDermott observed: “It has become apparent that companies are focusing on the health and well being of employees against the background of increasing workplace stress”.

Company cars are offered to all heads of organisation and senior management groups, with a typical purchase price of €53k for head of organisation roles and €42k for senior managers.

The number of employees in defined contribution plans are on the increase, with companies generally contributing 5% to 10% of base salary.