| Five per cent increase in pay levels forecast for international financial services companies |
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| Salaries in Ireland’s international financial services firms are set to continue to increase, according to Mercer’s International Financial Services Remuneration Guide (IFSRG) 2006, with remuneration increases driven by incentives and commissions writes Mary McDermott of Mercer. |
Pay levels in Irish IFSC companies are forecast to continue to increase, according to a recent survey conducted by Mercer Human Resource Consulting. Mercer’s International Financial Services Remuneration Guide (IFSRG) 2005 shows that employers across the Irish IFSC sector are projecting salary increases of 5 per cent for 2006. This projected increase is marginally ahead of 2005 IFSC and other sector increases. | | Mary McDermott |
Mary McDermott, Consultant with Mercer noted, ‘Larger incentives and commissions are driving the increased compensation compared to 2004. This suggests that companies are willing to pay for top performing talent who can help drive revenue and company growth. There is increased willingness by companies to acquire strategic talent and pay a premium when hiring in key areas. For example, underwriting positions and fund management positions have experienced significant increases in median total remuneration in 2005 compared to 2004.’
Mercer’s IFSRG values the total remuneration package - base salary, annual bonus, stock options and benefits (company car, pension, private health, life assurance, disability benefits and share purchase plans). Mercer has observed that companies are increasingly adopting a total remuneration approach to employee compensation. There was a slight increase in the prevalence of defined contribution (DC) pension schemes since 2004 although contribution rates have remained steady. 82 per cent of participating companies provide DC schemes with an average employer contribution of 10 per cent and average employee contribution of 5 per cent. Private medical insurance has become a standard benefit within the IFSC sector, with 98 per cent of companies providing private medical insurance to employees. The provision of paid maternity leave is increasing, with a median of 90 days paid leave in 2005. Also, paternity leave seems to be receiving more attention this year with a median of three days paid leave for fathers.
‘Compensation plays an important role in attracting and retaining talent. Companies are now recognizing that they need to vary the compensation structure and benefits package for employees with specialized skills to show that they value key talent,’ said McDermott.
Mercer Human Resource Consulting’s International Financial Services Remuneration Guide, 2005, includes data from 44 organizations representing approximately 1,267 Irish IFSC employees.
The guide recognizes the diversity of skills and responsibilities within IFSC companies. In an effort to assist companies measure and benchmark pay levels for technically specialized skills, Mercer’s survey examines compensation for 72 roles (from receptionist to CEO) in following five career streams: head of organisation, senior management, junior/middle management, sales force and professionals /other employees. This enables employers to compare highly qualified individual contributors to management level staff in a more accessible format.
An interactive web-based tool enables participants to generate custom statistics based on their chosen criteria and peer group. The on-line delivery of the survey was a major attraction for companies as, ‘the interactive web-based tool enabled participants to effectively generate custom statistics based on their chosen criteria and peer group. It also provided participants with access to multiple surveys within one survey,’ said McDermott.
Commenting on the survey Deirdre Maher of Pioneer Investments Ltd said, ‘The information in the survey is extremely useful in allowing us to analyse our market offering and underlines the competitive nature of employee packages,’ Michael Brady of Mediolanum International Life added, ‘I like the fact that we can create a peer group specific to our industry sector, and run a report which compares our data against it. In the past, for benchmarking purposes, we found it difficult to find a group of companies that were of a similar size, and within the same industry as ourselves’.
Clare O’Connor of Hannover Reinsurance (Ireland) also remarked on the survey results, saying, ‘I am delighted with the new layout. And the fact that the Guide now includes a better split of cash and non-cash based remuneration makes our job easier in evaluating a complete compensation and benefits package for our employees. Position classes are also very helpful in our organisation, but I’d like to see more participants in the same business as ours’. |
If you are interested in participating in this year’s survey, now entitled Mercer’s Financial Services Remuneration Guide 2006, or wish to purchase a copy of the 2005 survey you can visit www.mercerHR.ie. or contact Mary McDermott, Mercer Human Capital Product Solutions, phone +353 1 411 8316 or email mary.mcdermott@ mercer.com.
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| Article appeared in the February 2006 issue.
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