Almost half of financial services professionals in the City expect their bonus to be as much as 24% higher than last year, according to a survey conducted in August by recruitment agency Morgan McKinley. What’s more, 43% reckon that the recent market volatility is nothing more than a storm in a teacup, while a third of respondents were convinced it would have no impact whatsoever on the size of their cheque.
Is this just typically bullish banker talk? Their optimism comes despite claims that the recent credit market woes will hit City workers where it really hurts – in the pocket. Last month, the Centre for Economics and Business Research Centre said bonuses could fall by up to a quarter this year, as the big firms come clean about their exposure to the US sub-prime market.
Indeed, judging from the press coverage, you’d have thought bankers were more likely to be getting sacked than ordering a new Ferrari. Only this week, Robert Fowlds of JPMorgan Cazenove fanned fears of a mass jobs cull by telling an industry conference that there was a hiring freeze at all the big US banks.
According to Morgan McKinley, however, employers in the City are ploughing on regardless. New vacancies were 3% up on the previous month, and 8.5% than this time last year, with graduate recruitment numbers set to rise by a hefty 13.5%.
This could be a sign that employers have learnt their lesson from the first few years of the decade. With markets choppy in the wake of the dotcom crash, many companies stopped hiring altogether – and are now faced with a chronic shortage of talent at the more senior levels.
So they need to keep on recruiting – and if they cut their bonuses to their current staff, it could make it that bit harder to attract the next generation.