A panel of headhunters gives its assessment of typical London pay packages. Base salary: 65,000; bonus: highly variable, dependent on organization and individual performance, but usually between 40%-60%
There is a popular perception that in the context of City employment, Human Resources (HR) is the fluffy department, staffed by individuals one only ever sees on joining or leaving the institution in question, who spend their days doing nothing in particular.
This is a big misconception, according to Richard Colgan, who specializes in HR recruitment at Michael Page. He argues that although many banks don't seem to realize it, HR is one of their most valuable departments.
'A good HR manager or director will not only have good people skills, they will have a sound understanding of what the business is doing - and how - and will understand its strengths and weaknesses,' Colgan says. 'Most importantly, they will have the ability to coach management to make the best out of the workforce they have.'
Colgan says this underestimation of the role of HR has led to a shortage of good HR people in the city. Being non-revenue generating, many middle and lower tier professionals were seen as an easy target and let go following the post 9/11 slump: they have not been rehired in sufficient numbers to make good the shortfall. As a result a good HR professional with a track record at a good organization can command an impressive salary, with banks often looking to industry to make good the current shortfall.
'The City sees companies like Ford, Marks & Spencer and Unilever as a breeding ground for good HR professionals, with the latter often persuaded to make the switch because of the salary differential, which even for HR managers can be between 25-30%,' argues Colgan.
So what does a good HR executive get paid? Colgan suggests somebody at junior level, maybe 28 years old, with a good degree and a qualification from the CIPD (Chartered Institute of Personnel Development) and say, three or four years experience behind him or her is looking at around 40,000. This will rise to between 40,000-60,000 with maybe a bonus of 60-70% for somebody at senior manager or VP level to as much as 120,000 for an HR director, who might also receive a bonus of up to 100%.
Justin McAvoy of the Partners Group broadly concurs, suggesting that over the past few years overall packages have increased considerably.
'The current high level of demand means that we are seeing a marked increase in HR budgets, and therefore the need for commercially astute HR professionals,' McAvoy says. 'The need for those who can add value as well as manage transformational change and cost efficiencies is as critical as ever.'
McAvoy says a starting base-level salary for an individual with five years experience is around 50,000, rising to 75,000 for a more experienced individual with a financial services background. He estimates typical bonuses as being in the region of 40%.
The good news for HR professionals is that the current upturn in their prospects is likely to continue, as financial institutions recover their nerve and complete reconstituting departments cut back in 2001.
McAvoy says, 'Locating and retaining commercially aware and business focused HR professionals is becoming more of a challenge, as organisations are increasingly aware of the high level of demand within the current market.'
Colgan agrees, suggesting salaries will probably rise slightly on 2004 (which he describes as an excellent year for HR). However, in many of the smaller and medium sized institutions, where HR employment is expected to see most growth over 2005, salaries are expected to rise. With banks not known for paying good money for nothing, it would seem that perceptions of HR being 'fluffy' are indeed pretty wide of the mark.
Figures and commentary by Michael Page and the Partners Group