Despite a challenging operating environment, Global Trade Search’s third annual salary survey reflects the ongoing emergence of global trade and transaction services, with incumbents enjoying improved career prospects and status within their organisations.
As per last year’s results, the importance of global trade and transaction services (GTTS) remains high, with 83% of respondents – up from last year’s 50% – saying that banks in particular are continuing to increase their commitment and resources to the business.
“I see more resources being deployed to global transaction banking in the way of technology updates, product development and staff increases,” reports one respondent.
However, despite the many positive responses, several participants were sceptical about the growth of the sector and were concerned that a recovery in investment banking and financial markets generally would divert the current resurgence in the GTTS product.
“At least officially, the banks are apparently dedicating more resources to this business area, although the level of commitment is not always clear,” says one respondent. Another described the investment in the business as a “short-lived uptick”.
Anecdotal feedback from the survey indicates that much activity in this space depends on the effects of Basel II and III, coupled with the European sovereign debt crisis, which has, and will, continue to force banks to sell down their trade finance portfolios.
European banks in particular – with their shortage of dollar liquidity – were identified as being less active in the sector, while the importance of the business is seen to be growing for US and Asian institutions.
In terms of expected growth over the coming years, nearly half of all respondents expect this to come from trade and supply chain finance.
However, a small but highly vocal group of respondents (10%) cited trade asset distribution and trade-related funds management as the fastest growing emerging business area within the GTTS space and spoke about the potential of funds and other investors to pick up where the banks have left off and provide alternative sources of funding to markets and corporates that the banking sector has ignored.
The volatile financial environment and the mixed fortunes of a number of financial institutions were reflected in GTTS compensation trends. 45% of respondents reported higher total compensation (salary and bonus) compared to last year, while one third reported minimal or no change to their pay level. However, a significant 21% reported a reduction.
Well over half the respondents to the survey earned base salaries in excess of US$100,000. 38% of respondents earned base salaries of more than US$150,000, while 19% earned more than US$ 200,000 per year.
When asked how respondents would prefer their compensation to be structured, an overwhelming three quarters responded that they would prefer a higher base salary with limited bonus potential over a lower base salary with unlimited bonus potential.
This result and accompanying comments from respondents reflected a perceived lack of transparency regarding bonus policy, with one respondent noting: “Bonuses are too much at the discretion of the employer, so there is no control over it for employees.”
Respondents were conscious of the fact that their remuneration may be penalised as a result of a poor performance of their financial institution at large. “Bonuses are a bone of contention,” says one participant. “The effort I put in is the same whether the markets are good or bad.”
In terms of the value of bonuses, the bulk of respondents reported that their most recent bonuses came in at less than 50% of their current base salary. However, a significant 6% of respondents received bonuses exceeding 100% of their salary, suggesting that institutions are still rewarding exceptional performance. The majority, or close to 62%, of bonus recipients collected their lump sum entirely in cash.
Climbing the ladder
In last year’s survey, responses and comments suggested that many GTTS professionals saw themselves as undervalued and poorly rewarded, and when asked what would be their prime motivation to change jobs, a resounding 71% answered increased compensation. Yet this year, when asked the same question, the responses were vastly different: 69% of respondents cited career progression and opportunity as their prime motivation for changing jobs.
“I think this is interesting as it suggests that compensation concerns have been largely addressed and that GTTS professionals are more optimistic regarding their career development potential, which relates directly to the sector’s raised profile and increased importance,” comments GTS director Sarah Hutton. “Ultimately this is good for individuals professionally, a positive development for the sector and the best way of attracting new talent to the industry.”
Recruitment in GTTS was relatively active last year with 9% of respondents moving organisations. Yet despite this, wage inflation remained under control with the majority of respondents (32.3%) moving for base salary increases of 10% or less.
This is in line with the idea that career progression and opportunity has become a more important career driver than financial reward, but also reflects the reality of the current financial situation, for, as the survey showed, a significant 16% of respondents changed jobs for the same or reduced salary.
Almost 14% of respondents were promoted internally during the year, however, for the majority, or 36%, this did not result in any increase in base salary whatsoever.
For many, bonuses too remained stagnant. Although this is certainly a sign of the times, it may also indicate the prevalence of individuals being held in an ‘acting’ position before taking on the full benefits of their new position.
Despite the investment in the sector, GTTS did not escape the restructurings and redundancies which were prevalent elsewhere. Nevertheless, all respondents that offered anecdotal evidence of having lost their jobs were pleased to report that they found work with new employers fairly quickly.
Respondents, who may have historically preferred financial compensation, are now looking increasingly for alternative rewards and recognition, which may reflect that compensation issues in the sector may have been largely addressed by the realignments of recent years.
As one respondent noted: “Non-financial rewards go miles to complement financial rewards,” while another commented:
“Money is not the most important thing, but if the money isn’t right it becomes the most important thing. Once the money is ‘sufficient’ what you really want is a feeling of having made, and continuing to make, progress in your career.”
In considering the nature of non-financial rewards, working arrangements that enhance work/life balance were resoundingly ranked first, followed by increased training opportunities to enhance career development and progression.
The prominence of work/life balance is not surprising in the current environment. However, the high ranking of training and development opportunities reflects the extent to which the GTTS sector has underinvested in its people.
As one respondent commented: “Unfortunately, internal development is often limited and new opportunities need to be sought outside the organisation.”Another added: “Western companies in particular do not have career progression built in for staff.”
Over 12% of respondents regarded participation in the speaking circuit as valuable for their career development. Many of the more experienced respondents regarded membership of an executive committee as a meaningful reward and recognition of their services and an important vehicle through which organisations could take advantage of their knowledge and experience. Involvement in CSR projects was also popular.
A startling 95% of respondents regarded non-financial rewards as “good to have”, and of that proportion, nearly half see them as an essential part of career development and enhancement.
Respondents’ comments underline the significance of this and suggest that many organisations may have overlooked the value of non-financial rewards as a way of recognising their staff’s efforts and promoting their professional growth. These comments all serve as good news for business and HR who increasingly look at ways of rewarding people outside the typical financial compensation framework.
One respondent reflects: “Rewards which enhance my status within the organisation actually help me in my role, which is good for the company, and satisfying to me.”
These responses reflect a key emerging theme from this year’s survey, as summed up by GTS’ Hutton: “Despite the ongoing challenges facing all organisations, people who work in GTTS are genuinely proud of their product space, which delivers real economic value on a global basis.”
Hutton explains that this is also reflected in the strong sense of altruism and a willingness to give back through the development of junior professionals, knowledge-sharing and wider social engagement in CSR projects.
“Although up until recently GTTS may have been under-invested and largely ignored, it may well lead the charge in restoring the reputation of the financial services sector,” she adds.
Global Trade Search places the people behind global transaction banking and trade finance. As a specialist search practice with unparalleled connections, GTS provides the industry with a single source of talent across the core disciplines of structured trade and commodity finance, trade and supply chain finance, cash management and payments, card issuance and merchant services and political risk insurance.
GTS is a joint venture between Healy Hunt, a specialist in financial services’ recruitment for over a decade, and Exporta Publishing and Events Ltd.
For a full copy of the 2012 GTS Salary Survey or to find out more about how GTS can help you, contact firstname.lastname@example.org or email@example.com