Banks: collective pay rises expected in 2022

While the trend over the past two years has been to freeze salaries across all sectors, with the recovery and rising inflation, the balance could tip in favor of employees who want to be rewarded for their investment. Among the sectors forecasting pay rises in 2022, the banking and finance sector is heading for record profits. Here's a closer look at the expected collective pay rises.

The best year since the 2008 financial crisis

As the fifth wave of the financial crisis weighs on many countries, banks are gearing up for the biggest profits since the 2008 financial storm in 2021. For most of them, the figures have far exceeded analysts' expectations. Societe Generale, for example, posted a record Q3 2021 profit of 1.6 billion euros. Germany's Commerzbank, in the midst of restructuring, also surprised investors with a better-than-expected net profit for the same period.

This upturn in activity comes on top of the good performance recorded by equity markets. " Traders can look forward to another rebound of 20% to 25%, as in 2020," reports Johnson Associates to Les Echos newspaper. The New York-based firm, a benchmark for compensation in the financial sector, anticipates a 30% to 35% increase in bonuses received by investment banks. For investment bankers, variable bonuses are also set to rise by 20% to 25% this year, following a decline of 10% to 15% last year. Finally, only bond trading specialists will see their bonuses fall slightly.

Salary increases to attract candidates in 2022

The dynamic, fast-changing banking sector is looking to attract the best talent. However, due to the shortage of candidates on the market, the latter are in a strong position to negotiate remuneration packages. Against a backdrop of relatively low inflation, marked tensions in the recruitment market and significant difficulties in retaining top talent, remuneration in the banking sector could rise by 2.5% in 2022. At least, that's what the annual " Salary Budget Planning " report published by Willis Towers Watson suggests.

Experienced investment bankers are particularly sought-after, as are data and artificial intelligence specialists. The recruitment market in the banking sector is all the more tense as new branches of Anglo-Saxon banks have set up in the capital, not hesitating to poach employees of French banks to strengthen their teams. To win them over, they offer salary increases of between 20% and 30%. French banks, for their part, can't all match these salary levels, and they point to other advantages such as flexibility in work organization and CSR (Corporate Social Responsibility) commitments. To retain the best candidates, however, these players need to narrow the gap between promises made at the time of hiring and actual working conditions.