How will Europe's Private Capital market evolve in the next year? With innovative technologies driving growth and reshaping traditional markets, investors will be challenged and rewarded by upcoming developments over these coming years.
We are delighted to announce the release of the Altus Partners Compensation Survey for Investment and Investor Relations Professionals 2023. Please request a copy of the complete investment survey here. Or investor relations here.
COMPENSATION TRENDS SUMMARY
In the past few years, the competition for talent has reached seemingly unprecedented heights; however, this trend appears to be stabilising. As employers step back and evaluate their options in an environment of increased choice, the power differential between job seekers and recruiters may gradually lessen.
With Private Capital firms vying for talent from Investment Banks, the latter have had to adjust their compensation packages accordingly. Junior positions in these Banks are seeing a considerable increase as they prioritise cash-focused incentives over more senior roles; meanwhile, operating professionals at the Principal level can also expect an uptick, albeit small – while Managing Partner/ Partner levels see base salaries are not reflective of such significant increases.
Despite some encouraging findings, the survey uncovered that more work needs to be done regarding gender differences in compensation. Female representation in senior roles still needs to be more sparse, resulting in companies offering higher salaries for retention. It was also determined that there are discrepancies between female remuneration at lower-level jobs. Likewise, businesses need robust policies around parental leave so women do not encounter financial implications due to taking time off from work.
The immediate future looks uncertain, with inflation, banking troubles and political conflict roiling economies worldwide. Businesses must pay close attention to compensation models, especially base salaries in the U.K. Doing so can help them remain steady through challenging times and, most importantly, maintain a healthy talent attraction approach.
SURVEY OBSERVATIONS SUMMARY:
Q: Do you feel your current compensation is:
Despite increasing compensation in the industry, many employees still felt the need to be satisfied with their pay. Almost half (46.7%) feel they are compensated at market rate, and over 50% thought theirs were below the expected level. There is a discrepancy between actual salaries offered and employee expectations due to changes in labour markets and/or general cost of living pressures - both having an unavoidable impact on salary levels today more than ever before. To ensure fair pay and to attract and maintain high-quality talent, companies must review wages periodically while providing job role standards that align with current remuneration trends within respective industries. Competitive market payments are essential for sustaining employee satisfaction and motivation and encouraging tenures across organisations.
Q: If you were to move, how much of a % increase would you expect to receive in your total compensation?
Companies should be aware of the market's response to current economic conditions. A realignment is needed, with 65% expecting an increase in compensation. The next few years will see salaries readjusted accordingly, and companies must plan for this transition period - leading up to 2025 when all adjustments are complete. A clear understanding of the changing marketplace is necessary to ensure employers prepare themselves financially before any drastic changes occur.
Q: What is your most attractive benefit when looking to move?
According to our research, transparency around carry has become increasingly shrouded over time. Especially at the entry-level, employees are often left in the dark about sweeteners, such as incentive schemes that could help motivate them during their initial years of work. To remedy this situation, companies should adopt a proactive attitude and begin providing access to these benefits earlier, especially for those just starting their careers. The rationale stems from most talent attrition at the junior levels, which speaks to the significance which employers need to award to this matter.
Q: Do current market conditions make you more or less likely to leave your employer?
In today's shifting economy, employers should face the reality of the impediments of external conditions' on talent retention. Survey results showed that 25% are more likely to leave their current employer in light of market forces, and 34.72% are less willing to do so - a stark reflection of how economic influences vastly shape employee decisions about job security and mobility. Employers should consider these changing trends when formulating strategies for recruitment, development, and long-term stability within their organisations.
Read the full report here.
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