Headhunters trying to move staff from one bank to another report a surge in the number of banks willing to offer 'buybacks,' or increased pay, to prevent staff from leaving.
"Buybacks are the theme of this year," said Neil McKay, a consultant at search firm Sheffield Haworth. "There seems to be a lot more money available and banks are acutely aware of the need to retain staff. - They just can't afford to lose people."
Lee Thacker, a partner at search firm Highland Partners confirmed the prevalence of the buyback phenomenon. "There's a buyback on every move," he said. "Pretty much every bank announced record profits last year, and they all bank want to hire. But to maintain growth they also need to retain people."
Thacker said buybacks can include increased responsibility or a new job title, but more often take the form of higher pay. Banks will typically match the offer made by the poaching bank, and will often exceed it. In extreme cases, he said people can double pay packages by threatening to leave.
Banks seeking to retain staff are usually in an advantageous position because unlike the rival doing the poaching, they don't have to buy out employees' accumulated stock.
Banks seeking to expand headcount this year include Lehman Brothers and Bear Stearns, which each plan to increase staff by 5-10%, while Goldman Sachs expects an 8% increase. Other recruiters include Alvarez & Marsal, the US turnaround and restructuring firm, which plans to add an additional 15 consultants in the next six to twelve months.
How to play it
So what should you do if you're in the fortunate position of being offered a buyback? Recruiters say the most important thing is to get details of the counteroffer in writing, preventing the bank from reneging on its generosity at a later date.
McKay says you should think twice about accepting a buyback in any circumstances: "If a bank didn't value you beforehand, it won't make any difference if you hold a pistol to their heads." But as a headhunter whose job is to persuade people to quit, he admits his opinion may be somewhat biased.