Fisher Capital Management Corporate News: FSA guidelines will signal end of staff retention bonuses

The financial services sector will no longer be able to offer staff retention bonuses, as a result of new payment guidelines from the Financial Services Authority (FSA).New rules put forth by the FSA attempt to align pay and other staff rewards with jeopardy, so as to avoid a situation where employees are given lucrative incentives to engage in potentially risky activities.

Jon Terry, remuneration partner for PwC, explained that the FSA has effectively “introduced the world’s toughest pay rules to the UK financial services industry” and warned that firms must take steps to comply before the June 30th deadline.
He added that while some measures will be welcomed by workers, but bonus restrictions are likely to be less popular.
“The latest announcements will spell the end of guarantees for existing employees, which had been an important tool for firms to retain talent,” he explained.
Last week, expert Chris Welford told the magazine’s readers that more freedom in the workplace can boost staff retention, which could be an alternative strategy for firms.