Big City bonuses are back as firms bid to keep staff

A new war for talent has broken out in the City as employers battle to recruit and retain staff now the economy has picked up.

Recruitment firms say accountants and management consultants are receiving pay rises and retention bonuses worth up to 40% of salary.

There has also been a big increase in the size of counter-offers that employers are making to retain existing staff.

Dave Way, managing director of accountancy recruitment firm Marks Sattin, said newly qualified accountants were particularly in demand, with average starting salaries up 15% to around £57,500.

"In London, seven out of every 10 candidates are now being offered more money to stay in their roles," said Way. "Counter-offers of up to
25-30% of base salary are not unheard of."

He said during the nadir of the recession 18 months ago, only about 10-15% of employers made offers to keep existing staff, and a counter-offer might be worth just 5% of salary.

Experts said it was not only economic recovery but also corporate restructuring and greater banking regulation that was driving demand for middle managers.

Astbury Marsden, a recruit-ment firm for management consultants, said it was seeing a surge in the number of employers offering "retention bonuses", which could be worth up to 40% of salary.