Recruiters Morgan McKinley have released the findings of an online poll about City staff's bonus expectations. 34% of those who participated in the survey expected their bonus to rise in excess of 65% in 2004. On average, staff expected their bonuses to be 35% higher than last year. Look, is that a pig flying over there ? Once again, staff bonus expectations look to be somewhat on the optimistic side.
Firms will need to carefully manage staff bonus expectations this year, but, at the same time, take care not to demotivate the workforce. This time last year, we had already heard several firm CEOs crow on about what an excellent year it had been. Staff bonus expectations went through the roof at those firms as a result. This year, CEOs are keeping their mouths shut.
Recruiters are also saying that they have noticed that the number of jobs that need filling has tailed off of late. This is down to the usual seasonal and pre-bonus cool down and the fact that several firms are in the midst of restructures or reviews. According to Morgan McKinley, the supply of candidates is currently outstripping demand and it is taking candidates longer to secure a new role.
Morgan McKinley CEO Ken Brotherston said that 'the majority of staff expecting big (bonus) increases are likely to be disappointed.....2004 is not going to be the bumper year some are hoping for'. Brotherson is more bullish, however, about job prospects in the new year. He says that 'early indicators point to a strong outlook'.
This may be wishful thinking, however. The Centre for Economics and Business Research has already downgraded its job growth projections for the City for 2005. And City firms are likely to wait it out next year to ensure that any recovery is sustainable before they rush to judgement and ramp up the payroll numbers. They will not want to repeat the mistakes of 2004 - hiring ahead of an upturn that never really materialized.