More than half (53%) of banks and financial services firms predict an increase in employee salaries, according to a poll from Towers Watson.
The expected pay rise is perceived as a means of maintaining employee incentives in the wake of the planned EU regulation to cap bonuses.
Of the 150 financial services HR professionals surveyed, a third predicted that companies would pursue alternative reward strategies to appease employees, while only 7% expected a decrease in overall pay.
Mark Shelton, Managing Director of Towers Watson’s financial services Talent & Reward practice, said: ‘Financial services companies are aware that when the EU bonus cap comes into force many of their employees are going to receive overall lower pay and they recognise the need to make up for this shortfall in a number of different ways.
‘Some will do it through higher fixed pay or increased pension contributions, but many companies are planning to invest in training and career development, healthcare and flexible working programmes in order to continue to motivate and engage employees despite the potential impact on their annual pay.’
Read more about salaries in investment banking.