Your bonus was terrible. Now what?
So your bonus was down in 2022 compared to 2021? Welcome to the club. For most people, it's not about direction, but extent. In the current climate, a 15% decline is good. Anything more than a 40% decline is bad. A zero is always awful.
The real question is what you do about your horrible bonus. Here, the advice varies.
"Banks have tested the water with this year's bonuses," says one London headhunter who focuses on the macro space, where hiring has been strongest. "They have been very mixed, even within teams, and there's a lot of concern about flight risk. Most banks have held something back in reserve to use as a counteroffer if people try to quit."
In some banks and for some roles, it may therefore make sense to test your employer's mettle. There are already tales of "pretty aggressive" counteroffers this year for people who've tried to quit in a post-bonus huff. Meek acceptance of a diminutive amount raises the risk of receiving a similarly sized bonus next year. At Goldman Sachs - where markets bonuses don't seem to have been as bad as the 30% declines initially forecast - there's talk of revolt and of the "opportunity cost" of staying, particularly in sales roles, where some people say they were paid down 50%. Multistrategy hedge funds (which have their own issues) are seen as the better bet, but offers can also be used as leverage for negotiating a pay rise this year.
And yet, counteroffers come with their own well-documented risks, not least the fact that most recipients leave soon after receiving them anyway. In some sectors, they're not available because bids for talent are hard to come by. UK firms like Berenberg, Liberum and Shore Capital have zeroed swathes of equities people because "they know there's no other home for them to go to," says one headhunter. Not for the moment, at least.
Having made your displeasure clear, then, the best strategy is probably one of patience. Although banks like BofA have a hiring freeze and although firms like Goldman have been cutting staff, recruitment in January wasn't that bad. Figures from our own jobs show that while there were 17% fewer roles available in January 2023 than 2022, there were twice as many available as in January 2021. While most headhunters- even in the macro space - say that hiring is currently slower than last year - some are optimistic that things will pick up as 2023 goes on. Firms that have zeroed people will suffer a staff exodus then, predicts one equities headhunter.
In time, it's even possible that your bonus-induced anger will be defused. If you were paid down, one headhunter goes so far as to suggest you deserved it. "People were paid what they were worth," he says,"I've seen people up 15%, but they produced phenomenal numbers." Another suggests embracing acceptance: "A lot of people are resigned to this year's bonuses," he tells us. "2021 was an outlier and a crazy year - there were huge numbers coming out, so if you're only down 20-30% this year, you're back to normal."
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