Navigating bonus season: Buying out bonuses

In a closely connected industry such as banking, front office professionals are always in high demand. Before moving to a new role however, job seekers often consider waiting for their annual performance-based incentives, especially during the upcoming bonus season. Should companies looking to hire wait for the bonus season to be over? Or should companies aggressively offer buy-outs to secure their desired talented professionals?  

Michele Manabat, senior consultant in the banking and financial services division at Robert Walters Philippines, shares her insights on why banks should consider buying out candidates’ bonuses:

To ensure you’re not losing out to your competition.

With experienced professionals beginning to retire, the banking industry now faces a shortage of specialised candidates with holistic experiences. Employers have subsequently started to see value in poaching key staff from rivals by offering them a figure close to their promised bonuses. According to the Guardian, banks are currently equipped and ready to buy out 100% of a potential employee’s shares or options with their current employer. If you are not at least considering buying out candidates’ bonuses, you might be lacking behind your competitors.

To stand out among multiple offers.  

Hiring managers are increasingly faced with competition for top talent. In candidate-driven markets like banking, job seekers would have an average of three job offers before making a decision. Compensation and bonus buy-outs may become the key factor driving candidates’ choices.  

However, it’s important to keep in mind that talented professionals often consider factors beyond financial compensation and bonuses in their career decisions. These include:  

• Growth and career progression. This is especially so if they think the long-term earning potential of a new role exceeds their short-term loss of moving before receiving their bonuses. As Lou Adler of ‘The Original Headhunter’ noted, “If it (the job) is a major career move, they (candidates) will take less money than initially desired, and sometimes no increase at all, if the upside career potential is huge.

• Organisation culture. In today’s millennial workplace, companies need to think about the whole employee offer package; not just compensation and benefits. Non-financial factors such as employees’ work-life balance, the company’s impact on the community, and whether a company’s vision, mission, and goals align with employees’ beliefs and objectives, are becoming increasingly important.

At the start of the new year, hiring managers have to ask themselves if they have the luxury of time or money to decide on candidates. From our professional experience, bonus buy-outs are often on a case-by-case basis that factors in the value of the candidate in the market. Oftentimes, especially for niche market hiring, we recommend bonus buy-outs to be paid through an instalment proposition, whereby candidates are assured of the figure, while companies secure candidates’ commitment.

Should you buy out candidates’ bonuses or focus instead on non-financial incentives? Again, there is no perfect answer to this, and it is best decided with expert advice from your trusted specialist consultants, especially on the gruelling journey of navigating the world of banking and bonus buy-outs.

Visit Robert Walters’ hiring advice page to learn more about securing your ideal candidates, or contact Michele for a confidential discussion.