Competition raises the perks stakes

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The list is endless, and increasingly important, although most investment banks remain tight-lipped about exactly what they offer. Rachel Erskine, senior consultant at Harvey Nash, the financial services search firm, says: 'Fringe benefits are nowadays seen as a necessary component of the pay package. When the cash and stock components are on the table, people will continue to query what other benefits are on offer. In some cases, if these are unsatisfactory, this could jeopardise the job position.'

Some are a bit more sceptical. Michael Moran, head of practice at Penna BBM, says: 'In my experience, fringe benefits tend to be the icing on the cake in the recruitment process. It only tends to become an issue when, for example, an employee stands to lose a benefit already available on their present job. They might then want to negotiate.'

But for many banks, perks are of most value in retention and motivation. Mike Ashton, manager of human capital at Deloitte & Touche, says that it is proven that employers that offer good benefit packages do better and also enjoy higher staff retention rate. He says: 'There are also the more intangible benefits like working more efficiently and being motivated, but these are less easy to quantify.'

Ashton says there are two main types of package. One is the traditional or fixed benefit scheme, which offers around five to six benefits, which sometimes depend on the seniority or status of each employee.

Harvey Nash's Erskine points to the differences in attitudes between European and American investment banks. She says: 'American banks do have much more of a broker/dealer mentality and are much less creative and less prepared to spend money on offering fringe benefits.' But generally, in both the US and the UK, employees are attracted to good healthcare, pensions and some form of save-as-you earn schemes. Flexi-time is also a popular choice, especially among women with children.

Ashton argues that the financial services sector is increasingly moving towards the second, more flexible approach, offering a long menu of benefits from which employees can choose. Harvey Nash's Erskine agrees. 'Some of the big investment banks are jumping on the flexible benefit bandwagon, realising its value,' she says. One such is UBS Warburg, which champions the use of flexible fringes and is more forthcoming than most about its offerings. Chris Ashford, head of regional benefits at the firm, says: 'It is all about the war for talent and we wish to develop benefits that suit the employees' individual lifestyles.' UBS gives its staff an annual flex allowance to spend on fringe benefits. 'This enables employees to express their preferences, whether to increase their pension, insurance cover or purchase additional benefits. The bank is able to reduce the cost of these benefits by using its bulk purchasing power.'

The choices include the more traditional benefits such as pensions and health benefits, long term disability allowance, childcare, life assurance, dental insurance, travel insurance and critical illness cover. But UBS also offers more contemporary alternatives, such as car parking, additional holidays, pension education and tax return preparation.

It is currently trialling a lifestyle management benefit that encompasses concierge services, health and childcare.

Another bank that offers flexible fringes is JP Morgan, which boasts a wide range of services similar to those of UBS Warburg. It offers maternity and paternity leave, relocation allowance, season ticket loans, restaurant facilities and eyesight tests. The bank also offers an Employee Assistance Programme (EAP). This is an anonymous 24-hour phone service, which can be used for a range of purposes, from finding the right school for the children or a nursing home for elderly relatives, to counselling.

Kate Grussing, vice-president at JP Morgan, says: 'Emergency crèche facilities are offered to all. Staff can use it any time their child minder is off or sick. JP Morgan is very family friendly.' Grussing admits that there are differences in the type of benefits offered by the bank to its London employees and those in New York, which depend somewhat on differences between the two centres. She says: 'In London, for example, unlike in New York, it is very hard to find a dry cleaners open past 6pm. London has a younger crowd, but we do nick successful ideas from each other.'

Penna's Moran says: 'Basically, what the banks are trying to do is to get people to focus on work. But from the employees' perspective, this might not always be ideal. If it is driven to encourage employees to spend all of their time at work, this won't motivate people, as a work/life balance is much more important nowadays.'

But some are taking account of that as well. For example, investment banks are much more willing to give staff significant time off for travel than they used to be, keeping jobs open for months at a time. Or alternatively, they post employees to different locations around the globe.

On a more exotic note, there is the company-paid dating service, which some see as another way of maintaining the work/life balance.

The combination of international lifestyles and onerous workloads does not leave enough time for finding partners, explains Virginia Sweetingham, principal of Berkeley Sweetingham International, a professional dating agency or personal headhunter, as it prefers to call itself. She says: 'It is widely accepted that people perform better if they are in a settled and loving relationship. So companies can get the most out of their employees by making this available.'

But at what point does it all go too far? Cathy O'Bright, senior consultant at Hewitt Associates, says: 'Flexible benefits need to be good for the employee while also supporting the employer's business strategy.' In good times, when top people are hard to find, it may be easier to justify even the most unusual benefits and services. In hard times, it may be back to basics. But for many employees, having a choice is what counts.

JPM's Grussing concludes: 'Companies have to be flexible, it is not a case of one size fits all. Roles in the City of London are very demanding, regardless of the jobs and firm. Companies need to recognise that they demand a lot of their employees, who expect commensurate benefits, not just tangible things like compensation.'