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MORE BONUSES FOR THE CITY BUT STAFF WILL BE LEFT DISAPPOINTED

MORE BONUSES FOR THE CITY BUT STAFF WILL BE LEFT DISAPPOINTED
 
- More City businesses will pay bonuses than their staff expect, but
- Staff anticipate larger bonuses than businesses are prepared to pay
- City workers also over-optimistic of base salary increases in 2011
 
City staff are set for disappointment as confidence over the size of their annual bonus outweighs business expectations.
 
Research from Ambition, the global recruitment company, shows that more businesses will pay out bonuses than many staff expect 52% of staff expect their companies to pay bonuses compared to 70% of businesses who expect to pay. But the size of the bonuses will leave many disappointed.
 
For staff in support roles such as accountancy, marketing, and middle and back office functions, headline grabbing bonus packages are not a reality. But despite reports of total bonuses in the City exceeding 7bn, support staff who expect a bonus this year are over-confident of the size of their pay-packet. On average, City workers expect to receive 9% of their annual salary as a bonus this year above the 8% of annual salary that HR departments expect to pay out .
 
Staff will also be disappointed with the increases to their annual salary for 2011. Having had salaries frozen for much of the economic downturn, City staff expect their salaries to rise by 5.7%. But businesses expect to increase salaries by an average of 3% - in line with current levels of inflation (3.2%).
 
Tim Gilbert, managing director of Ambition, said
For the vast majority of staff in the City, multi-million pound bonuses are not a reality. Of the 400,000 workers in the City, fewer than 5% will be getting the headline grabbing bonuses that cause such public uproar.
 
Strong growth in the City and skill shortages in the hiring market over 2010 have left many workers expecting a certain level of bonus. But it seems that despite the recovery and much hyperbole over the sums of money that might be paid, businesses are going to be more frugal than many anticipate. There is a lot of pressure, particularly in the financial services sector, to keep bonuses in check and businesses are responding to that sentiment.
 
Split by sector, staff in the financial and professional services have over-estimated their bonus expectations, while those working within commerce and industry are in for a pleasant surprise when they are handed their bonus letters (see tables 1 and 2). However, all industry sectors will be let down by the size of their salary rise next year.

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