Over 40% of bankers "dissatisfied" with bonus payouts

Lionel Kaidatzis 04 Apr 2017

Morgan McKinley Japan's 2016-17 Financial Services Bonus Survey finds that over 40% of bankers are "dissatisfied" with their bonus payouts.

Last year we reported that, for three years in running, employees in the Japanese financial services sector were "lukewarm" about their bonuses. This year the scales have tipped, and 40% of respondents say that they are "dissatisfied" with their 2016/17 bonus. 35% answered they are "neutral", and only 18% are "satisfied".

Key findings of the Japan Bonus Satisfaction Survey

  • Of those surveyed, 77% received a bonus, down by 9% compared to last year for the same pool of individuals.
  • 51% have received or are expecting a pay rise for 2017, a 5% decrease from last year for the same pool of individuals.
  • The median bonus payout is 21-25% of the base salary. This is the same as last year's survey results
  • 40% of respondents are dissatisfied with the bonus they received, a significant increase from last year's survey (28%)
 
 
Morgan McKinley surveyed 257 individuals employed in the Japan financial services sector about their 2016 bonuses and 2017 salary expectations.

Fewer bankers taking home bonuses

When asked if they received a bonus this year and last year, 76% of those surveyed said they received a bonus in 2016/17. Of the same pool of individuals, 85% had been paid a bonus in 2015/16 (minus 9%). 
 
In last year's survey, 88% of respondents said they had received or were expecting to receive a bonus for 2015/16.
 
Both figures suggest that fewer bankers took home a bonus this year, a downward trend that continues from 2014/15.
 

50% of respondents expect a pay rise for 2017

51% of respondents have received some indication of a pay rise at the time of the survey, but of these same individuals, 56% had received a pay rise last year (minus 5%).
 
Expected pay rises are mostly modest sums of 1-5% of their current basic salaries, with a lucky handful (13%) due to receive raises between 5-12%. The highest reported is a generous 50-60%.
 
Those who did not receive any bonus or pay rise increased from 9% to 18%.
 
Morgan McKinley Japan's Managing Director, Lionel Kaidatzis comments on the report:
 
Our survey would indicate a disproportionate number of bankers are dissatisfied with their bonuses compared to the actual dip in payments. The disappointment seems to stem from the fact that despite a number of financial service institutions bouncing back quite strongly in 2016 their bonuses have either been flat or down. It is clear that bankers took home a smaller bonus this year, a downward trend that continues from 2014/15. This, no doubt, partly explains the increase in job seekers we have so far observed this year. 
 
So far it has been a reasonable start to the job market in 2017. Job opportunities were slightly down on our expectations, above and beyond the seasonal influence a number of banks started off the year cautiously whilst waiting on more visibility on their headcount budgets. Job volume has however increased throughout the quarter. Some institutions are up, others are down. In the overall the number of open vacancies is relatively flat on the same period in 2016. The approvals processes for hiring have however been elongated. There still appears to be a lingering degree of caution at the sign off stage. 
 
Perhaps the ripples of a turbulent 2016 - the slowdown in China, Brexit and the uncertainty surrounding the US elections have yet to be forgotten. What is surprising is the economic outlook for Japan amongst our participants was positive, with only 16 % of our respondents having an negative outlook for the remainder of 2017. Perhaps they think the worst of global issues are behind us. 
 

Japan Bonus Satisfaction Survey 2017

Lionel Kaidatzis's picture
Managing Director
lionel@morganmckinley.co.jp

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