In a recent Parameters Survey, we asked paraplanners about the bonus schemes run by their firms, as well as their views on whether they work in motivating and retaining staff. Fiona Bond reports.
As most firms know, attracting and retaining staff in a competitive market can be challenging. Many employers are finding themselves competing for a limited number of skilled employees and the pressure to retain talent has never been greater. Offering bonuses and incentives has long been a staple of employee pay but this approach has grown in popularity in recent years as businesses seek to attract and engage employees.
This trend is certainly evident across financial advice firms, with nearly seven in 10 (69%) paraplanners working for a firm that offers a bonus structure, according to our latest Professional Paraplanner’s Parameters Survey. In contrast, just one in three (30%) said their firm does not offer bonuses.
The most popular approach is offering employees a percentage of their salary, with two fifths (40%) of firms adopting this structure. A much smaller percentage (14%) have plumped for a flat figure for all staff while an even smaller number (10%) choose to offer a percentage bonus based on role.
One paraplanner told Professional Paraplanner that their firm operates a flat figure for all admin and support staff but a separate private, personalised bonus structure for advisers.
A large number of respondents said their bonuses were offered on a discretionary level, often based on a combination of personal and company performance.
One paraplanner said: “We receive a bonus pot based on profit, decided between staff from management on unknown criteria, plus a quarterly amount for the number of reports written above de minimis level of reports.”
Another respondent admitted: “I’ve no clue how it works, it’s based on performance with everyone getting a different amount.”
When asked how often their bonus is paid, the most common answer was an annual bonus, with an overwhelming 79% of firms opting for this. In stark contrast, just 10% of firms choose to pay their employees a half-yearly bonus and 7% pay quarterly bonuses.
The results of the survey also shed a light on the benefits of offering a bonus to employees, with 46% of paraplanners noting that receiving a bonus makes them more loyal to their firm. Nearly a third (32%) also said they would be inclined to stay longer with their firm as a result of their bonus, while 57% said it made them feel more appreciated in their role.
The results were similar amongst those who didn’t receive a bonus, with 76% stating that it would make them feel more appreciated as a paraplanner and 30% admitting it would make them more loyal to the firm.
One respondent said: “We get a percentage of salary but it’s based on four criteria within our business. This ensures our paraplanners and admin staff continue their high standards and as a small business, we work together to achieve a common goal.”
Another told Professional Paraplanner that it feels good to receive something extra not factored into their regular salary.
“It feels good as I try not to think of it or rely on it, so if I get one it is a bonus and I can think that’s more for a holiday or treat. I would be more likely to stay until it’s paid as there is a lag of 4-6 months,” they said.
More than two thirds (69%) of respondents also feel that bonus structures can be a motivating form of performance reward and 38% describe it as a motivating form of team reward. More than a third (37%) also said they felt it was a fair form of reward per se and 18% said it creates a feeling of a team within the office.
But the survey also revealed a level of dissatisfaction, with just over a third (34%) of respondents telling Professional Paraplanner that bonuses can be divisive within a team/ firm.
One paraplanner said: “If anything, it makes me less loyal to the firm as it’s at a low level relative to the industry.”
Another added: “I should be rewarded for my hard work and not how profitable the firm is. It makes me quite angry because it is not openly discussed and does not in any way reflect the work that I do. It’s a share of profits, not a bonus related to my or my team’s performance.”
Parameters is our monthly survey of the paraplanning community. All registered readers of the Professional Paraplanner daily email are sent an email once a month inviting them to take part. On average the surveys take around 8 minutes to complete. And every month we randomly select the name of one person who has completed the survey to win £50 in Amazon vouchers. Please keep an eye out for our mail and take part.