Employers may offer staff better benefits in one particular area, but generally not in all categories, Rana Hein-Hartmann of Funds Partnership said this week. Library picture: Rana Hein-Hartmann of Funds Partnership is seen speaking at a training seminar in April 2018. Photo: Maison Moderne
Employee benefit packages at investment fund outfits vary notably between sectors, according to a specialist recruitment firm.
Asset managers provide the best private insurance and pension plans, while custodian/depositary banks offer staff the most paid holiday and cheap loans, Rana Hein-Hartmann, co-founder of Funds Partnership, said in a web conference on 11 April.
The webcast presented results from the firm’s “Benefits guide 2019” report, which was based on information gathered from roughly 150 fund industry companies in Luxembourg, Hein-Hartmann told participants.
The Funds Partnership study found that asset managers “had the most competitive packages in general”, Hein-Hartmann stated on Thursday. That is partly due to the fact that many asset managers are part of the same corporate group as insurers, although “either way they tend to be quite comprehensive package providers.”
“It is quite challenging” for bosses looking to pinch staff from asset managers to work in another segment to match benefits packages, “simply because they have the best benefits”. That said, given the current competitive climate, competitors are doing their “best to match” benefits packages to “attract the best candidates”.
On the flip side, “people at asset managers tend to be a lot more technical and because they’re quite specifically skilled within a domain, promotions and sideways moves can be quite limited” at many organisations.
Hein-Hartmann recommended looking at the earning potential over an entire career: “take a long term view and see how it balances out.”
Paid leave: Custodian/depository banks offer most
Luxembourg’s “banking convention is the key thing that still drives benefits policy today”, she said. “The overall package at a bank will be quite good.” This is reflected not only in private pensions and meal vouchers. The amount of paid vacation, a minimum of 33.5 days and sometimes up to 35 days, is the “highlight of working in banking”. In fact, this “can be a big blocker” when non-banks try to recruit those employees, as bank staff are loath to give up the perk.
Real estate and private equity, including debt fund and infrastructure fund firms, had the lowest level of paid leave, according to the Funds Partnership survey. The reported range was 25 to 30 days, with the average being 28 days.
Asset management firms had a reported range of 29 to 35 days, with an average of 31 days.
Employers that offer higher private pension plans would typically offer lower benefits in another area, the headhunting firm found.
The “majority” of asset management firms offer junior staff 3%-6% of candidates’ annual salary; the figure was 5%-12% for senior staff.
“Most” custodian/depositary banks offer 3%-5% payable by the employer, but that “can go up to 8%” with seniority.
Around two-thirds of trust companies and professionals of the financial sector (PSFs) offer a private pension; the range is 3%-6%, with the average being 4% of annual salary.
Telecommuting is rare across all the segments Funds Partnership surveyed, largely due to data security concerns. It tends to be granted to staff who have “a lot of administrative work that… does not require them to log into sensitive information.” It also tends to be granted to longer serving employees. On the other hand, in risk and compliance functions, we “would rarely see someone working at home [due to the] operational risk attached to that.”
The majority of fund firms provide some sort of subsidised lunches, either offering vouchers (which offer tax benefits to both employers and employees) or an onsite staff canteen. The firms that do not are either small offices (say, less than 10 people) or are offices of “Anglo-Saxon companies that don’t understand” or do not have the workplace culture of providing meal vouchers, Hein-Hartmann stated on 11 April.
75% of asset management outfits, 65% of trust companies and PSFs, and 63% of custodian/depositary banks offer the higher value lunch vouchers (€10.80 per day). 40% of third-party management companies and 30% of real estate and private equity outfits provide the older value lunch vouchers (€8.40 per day).
Other benefits, flexible packages
Banks frequently provide employees with mortgages and other loans at preferable rates that can’t be replicated by a rival if they leave the company, adding another layer of employee loyalty. On the other hand, banks typically give smaller bonuses than firms in the other sectors covered in the study.
Funds Partnership has “seen massive growth" in the trust company and PSF sector "over the past couple years” largely driven the emergence of alternative investment funds in Luxembourg, she said. The firm saw “more variation” in benefits packages “within the trust sector” than any other. This is because most staff “will be sitting in a billable hours seat” and firms need to be “creative” in recruiting and retaining good client relationship managers to fill those positions.
During this week’s webcast, Hein-Hartmann recommended that employers offer junior, non-managerial staff some sort of overtime compensation if they expect employees to work extra hours on a regular basis (even if they are not legally obliged to do so). Otherwise, here in Luxembourg, word will quickly get around.
The report also looked at private health insurance, car and parking benefits, gym memberships, and profit sharing and stock options.