71% of Hong Kong finance professionals expect bonus increases in 2010
Hong Kong finance professionals have high bonus hopes with 71% expecting a bonus increase in 2010 compared to 2009. This according to the latest results released in the eFinancialCareers Global Bonus Expectations Survey. Out of those who anticipate an increase in bonus payout this year, 23% of them are expecting an increase of 11-30% and 14% of them are counting on a significant increase of 31-50%. The survey, conducted in September 2010, was a global survey on bonus expectations of employed bankers and finance professionals in Australia, Germany, Hong Kong, Singapore, US, and UK. A total of 5,671 finance professionals were surveyed, including 673 finance professionals from Hong Kong.
Decreases unlikely
Only 13% of finance professionals in Hong Kong expect a decrease in bonus this year compared to last year. Almost half of those who expect a bonus decrease cite company performance as the primary reason and only 2% of them believe that it is a reflection of their personal performance. In contrast, Hong Kong finance professionals who anticipate a bonus increase claim that both personal performance (36%) and company performance (36%) are key contributing factors to their positive bonus outlook.
Cash components up
The results also reveal that over one third of Hong Kong finance professionals, who expect the immediately available cash component of their bonus to change, also anticipate this change to be slightly higher in 2010 than last year. A further 20% expect their cash component to be substantially higher than the previous year.
George McFerran, Head of Asia Pacific, eFinancialCareers explains, “Escalating bonus expectation is a tell-tale sign of a candidate-led market which has inevitable retention consequences. In light of market upturn, finance sector employees in Hong Kong are expecting a bonus increase this year, especially if their pay cheque suffered during the downturn. Companies who fail to meet their staff’s growing expectations may find them leaving after bonus payout in the New Year.”
MPF worries
Nearly all finance professionals in Hong Kong worry about their MPF, with 90% feeling that MPF contributions offer insufficient retirement security. As a result, it is not surprising that half of finance professionals in the SAR claim that they will save and invest over half of their bonuses this year.
Late payments anticipated
A significant portion, 75%, of finance professionals in Hong Kong expect their bonus this year will be paid in 2011 and only 15% of finance professionals believe their bonus this year will be fully paid on or before 31 December 2010.
With growing market optimism, just under half of finance professionals in Hong Kong believe that the size of the industry bonuses will continue to increase over the next three years. They do, however, remain cautious—with concerns over both local and global market conditions as potential downward influences on the total financial services compensation.
Global comparison
Significantly more financial services professionals in Asia are expecting a bonus rise of some kind. In China, 75% of those questioned are anticipating a bigger payout, along with 69% of financial services professionals in Singapore. Finance professionals in the UK and US are less optimistic with only 57% and 50% of them, respectively, expecting a higher bonus this year compared to last year.
For many, the expected bonus increase will be significant. In China, 24% of those surveyed believe their bonus will be over 50% higher than last year, and in Singapore and the UK, 14-17% reckon they will be in line for an increase of over 50 percent. In the US, Germany, and Australia, however, a more measured one in ten are anticipating a 50% or above increase.
For banking industry regulators, these results offer little comfort. Despite their moves to limit cash payments to less than 50% of total bonuses paid, irrespective of the bonus size, the results suggest this is yet to happen. Of those expecting to receive a bonus who work in regulated areas of the banking industry in the US, Singapore and Hong Kong, the average expectation is that over three quarters of their bonus will be paid in cash. The UK and Germany both show similar trends among bankers—with over half expecting the greater part of their bonus to be paid in cash.
Paul Arkwright
Publisher
