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Hot jobs in IFSC command premium salary and benefits packages Back  
Ernst & Young’s remuneration survey in financial services shows salary growth in the IFSC outpacing the rest of the financial sector, a boon for professionals, but a main concern for management.
Salaries in international financial services have grown at around 4 to 11 per cent in the last year, while the coverage of incentives and other benefits continues to increase, according to the tenth annual Ernst & Young remuneration survey in international financial services. Increases in salary levels over the range of 4 - 11 per cent arise ‘reflect increased duties and responsibilities and strong demand for specific skill sets’.

The average percentage increase for IFSC chief executives were 9 to 12 per cent, Ernst & Young found. The survey covers nearly 100 companies from both IFSC and non-IFSC banking and insurance sectors, but is weighted towards the IFSC. 68 per cent of respondents were IFSC banks and 21 per cent were IFSC insurance managers.

The survey comes in the context of the latest Central Statistics Office figures which show there were 47,700 people working in banking, insurance and building societies at the end of March 2000, a 6 per cent year on year increase. Employment in banking was up by 1,900 in the year to March 2000 at 31,100, while in insurance, it was up by 1,800 to 13,300. Employment in building societies fell in the year by 2000.

Average wages for these jobs rose by 1.7 per cent, made up by an increase of 6.4 per cent for building societies, 2.7 per cent for banks and 1.9 per cent in insurance. The international financial services sector therefore appears to be paying rates of salary increases over and above the general level in the economy. The average level of wages in banking in the domestic sector may be held down by new and part-time types of banking employment in the retail area.

Average weekly earnings for financial services overall were £448.41 or £23,317 annually, according to the CSO. While comparing averages has its pitfalls, this is roughly the average salary level of an IFSC ‘Supervisor Credit Administration’ according to the Ernst & Young survey. It is, for example, £4,600 lower than the average for a ‘Fund Accounting Supervisor’ at £27,944. but higher than the £17,885 average for an IFSC Fund Accounting Clerk, one of the junior positions reported in the Ernst & Young survey.

Other benefits
Ninety-six per cent of companies surveyed by Ernst & Young offered additional incentives to salary, while 92 per cent of job holders are paid some form of incentive. The survey shows that companies are continuing with a policy of incentives for performance, and the preferred form of incentive is a bonus payment.

The main concern for companies in the survey was the cost of salary increases, followed closely by the issues of retention of key personnel, the implmentation of suitable incentive schemes and skill shortages within organisations.

Phillip Galvin, the organiser of the survey at Ernst & Young, said at their presentation of the report that ‘organisations are seeking to gain a competitive advantage through the skill sets of their people. Unsurprisingly, organisations who pay top performers better than average ones can expect an increase in value creation.’

This is a key issue for management, whether to pay above average in the expectation of deriving above average performance and value creation. The obvious problem is that this people management strategy requires that not all companies in the market will adopt it simultaneously, otherwise the aim to be above average in pay as well as performance would be frustrated.
It is also interesting to compare the range of bonuses against basic salary. While the range varies widely across jobs and companies, it is strikingly up to 100 per cent for some chief executives, finance directors and FX dealers. But it is not just in the top jobs where large bonuses are possible. Some financial accountants can earn bonuses of up to 85 per cent of basic salary. A fund accounting supervisor can earn up to 40 per cent of basic salary in bonus. Most bonuses seem to come in the range of 5 to 20 per cent.

The extent of benefits offered by IFSC and non-IFSC banks and insurance companies is shown in the table entitled ‘Benefits offered’.

Hot at the top
Since recruitment and retention of skilled people has become a top priority for management of financial services companies, Ernst & Young reported on the ‘hot jobs’ in the survey this year. These are positions, according to Philip Galvin, where ‘high calibre professionals are currently commanding premium remuneration packages. The notable thing about them is that they are by no means all at the top of the career pyramid. Some of the hottest jobs are entry or near-entry level positions, an encouraging fact for job entrants, and a bit of headache for management.

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