PUBLISHED: 11 Sep 2013 19:22:00 | UPDATED: 12 Sep 2013 09:18:45PUBLISHED: 12 Sep 2013
Bankers disappointed with this year’s bonus cheques might reconsider a rush for the exits as the grass
might not be greener elsewhere, recruiters warned.
The Commonwealth Bank of Australia paid bonuses on Tuesday, a month after reporting a record
$7.8 billion profit and lifting executive pay freezes. But a bank spokesman said it maintained “a very
moderate and restrained approach to remuneration”.
Financial Recruitment Group managing director Judith Beck agreed, saying the broader bonus outlook
“In some sectors there have been signs that some people still got good bonuses, but what we’re
hearing those people had to work twice as hard to get them,” Ms Beck said.
“If you didn’t get a bonus, don’t automatically think you should quit. The grass is not always greener.
If you’re in a team of 10 and not everyone else has made a bonus then it’s not you personally. It could
be external factors, such as the market, consumer trends or the product. But if most of the team has
made a bonus and you haven’t, then you need to look at it.”
Goal posts have moved
Ms Beck said the “goal posts” had moved and companies were requiring staff to meet increased
targets, which in the economic climate were difficult to reach given the sluggish market.
However, she said it was not monetary bonuses that were motivating staff at the moment, a change in
the culture in companies, with paid and non-paid benefits, was in demand from employees in order to
“People are very tired, many are doing the jobs of two to three people,” Ms Beck said.
“This means when the market picks up, they’ll be looking for a new job. When the market does return
you’ll also see smaller companies crop up and many businesses will be forced to offer carrots to
Mercer talent rewards practice principal Jason White said bonus pay was at risk across industries.
“Businesses are putting more emphasis on the overall reward equation being put into the variable
bucket,” Mr White said. “That’s being driven by increased pressure on organisations to tighten labour
costs, increase productivity and control fixed costs. We don’t see any changes in the current year
to suggest fewer people will be eligible for bonuses, but it is more the amount available.”
Randstad Recruitment group director Steve Shepherd said banks had recorded record profits and
employees would expect to receive their full bonus, despite the banks in the past copping criticism for
“But in the current climate, bonuses can’t be seen to be an expectation,” Mr Shepherd said.
“Companies are looking at employee performance with more scrutiny and measurement, rather than
giving bonuses as a pat of the back. There will be more accountability.”
Executive remuneration expert Denis Godfrey said: “The reality is incentives are incentives, in my
view and are not about working hard, not about trying hard, they’re about rewarding people who
succeed,” the managing director of Godfrey Remuneration Group said.
“Success is about delivering to plan and growing value for shareholders. I’m sure at the moment
people are working harder than they have in years because trading conditions are so difficult but that
doesn’t mean they’re going to get a better bonus.”
The great debate
Australian Human Resources Institute president Peter Wilson said there was great debate by
businesses and industry groups over bonus schemes, particularly listed companies who were
accountable to shareholders. “I think thought the bonus outcome for many this coming year will be less than previous years,” Mr Wilson said. “Bonuses flow from the economy and that’s been subdued. If you don’t get a great bonus, you’re in good company.” Mr Wilson expected lower economic growth next year.
“So employees need to offer their company ideas and ways they can deliver targets but negotiate hard
to get a share of the spoils. Those who can’t, pull your head in, value your income, don’t expect
anything, because keeping your job is the best thing.”