How to get a salary with lots of zeros
You don't have to be a whiz kid to make a fortune in the City, writes Roger Trapp
Wednesday 20 March 1996
A working knowledge of the increasingly complex products being developed by the world's banks can be a humble auditor's passport to a different world within the financial services sector. But would-be applicants for these potentially lucrative posts should be warned: they will be expected to jump through many hurdles and, while employers are prepared to pay a high price for the right candidates, they will not necessarily settle for paying those who are less than ideal lower salaries.
Martin Flatters of Hays Accountancy Personnel is just one of those in the recruitment market stressing that first-class academic backgrounds and "well-developed interpersonal skills" are almost de rigueur. In other words, just because the latest financial products are increasingly being developed by highly intelligent whiz kids known as "rocket scientists" does not mean that those involved in the operation and selling of them can fit into the boffin caricature.
As Mr Flatters says in his organisation's guide to salaries in the second half of 1995: "To maximise their career potential, staff should definitely try to gain a working knowledge of derivative products and in general learn a second or third language."
Nor does this just apply to those in the high-profile field of derivatives trading. James Rust, manager of the City team at the recruitment consultants Robert Walters Associates, says those seeking jobs with financial institutions in such areas as internal audit and product control also have to measure up to these standards. "They pay well, but they want to make sure they get their money's worth," he says.
But he also points out that being rejected by one bank should not lead to total despair. Many banks have such distinct characters that it is possible to spot the people who work for them. Consequently, "you can be right for one and totally wrong for another", he says. The same principles also apply to different roles, so that some candidates will be suited to corporate finance positions and others to, say, compliance roles, such as internal audit.
The result of this is a more active market than has been the case of late. Though Mr Rust stresses that the amount of movement is "not obscene", and Hays's research shows overall salaries rising by no more than inflation, City prospects look bright. It is seen as a fast-moving, multi-skilled and dynamic sector where accountants with relevant experience are highly regarded and "in universal demand".
So much for the incentives for the employers. For the accountants themselves, a key attraction of these posts is the bonuses available.
Accountants with a year's experience can earn a basic salary of about pounds 40,000 and expect a bonus of about 30 per cent of that as well as a car, says Mr Rust. As senior partners of big accountancy firms are only too ready to point out, those who rise to the boards of these institutions stand to gain from the additional area of stock options that can net several hundred thousand pounds at once.
Moreover, as Mr Flatters indicates, in order to retain as well as recruit the best staff, employers will have to be flexible about total packages.
Hays's research in the financial services sector indicates that a head of financial control typically earns pounds 60,000 a year, a head of internal audit pounds 50,000, while somebody with four years' post-qualifiying experience working in corporate finance can expect about pounds 58,000 - about the same as somebody of the same seniority working with derivative products.
At least part of the reason for the high demand, though, is the shortage of suitable recruits. This would be true in most circumstances, but it has been made worse by the fact that most of the large accountancy firms cut back on training contracts in response to the recession earlier this decade.
Finally, as part of the effort to motivate those who are hired, many banks stagger bonuses, announcing them at the end of the year and paying them out at the end of the following quarter. Some highly valued employees receive bonuses worth more than half their annual salaries.
Setting out promotion paths also forms a part of the attempts to motivate staff. But there is little room in the high-pressure atmosphere of the City banking arena for the formal training many recruits might have been used to at accounting firms. Instead, it is increasingly an "on-going, on-the-job process".
Perhaps for this reason the banks put a high premium on those who demonstrate "a high level of natural management, leadership and assessment skills".
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