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Barclays and the Banking Bonus

Posted by
28 Feb 2014

Anthony Jenkins has recently come under fire for his talent attraction and retention policy at Barclays - bonuses in a time of austerity have proved to be an incendiary topic, provoking wide spread criticism across the media.

It seems to be an open and shut case for many commentators and journalists; bankers doing the same old, in the same way, with nothing changing and it being simply a lack of will to change.

But is it really this simple?

I would argue not. Jenkins is responding to the challenges of change with the best weapon he has - the attraction, retention and engagement of talented professionals. If retaining the best talent takes a bonus or a higher base salary, Jenkins has little choice if he wants to ensure Barclays is fit for purpose for the future.

As the jobs market improves, talent will continue to move around - and whether this is due to a higher salary, benefits with a significant monetary value or a generous bonus scheme, there exists a real need for Barclays to offer the best a reason to move there and stay there.

Barclays and any other bank may find that 'talent' for the banking world is difficult to come by, hindering the innovation and change processes this sector needs to restore its reputation and build trust again with the public. This is the dilemma that Barclays and every other bank with so called 'short term' cultures will have to face - how to make sure that you acquire the best in an era where lifetime loyalty to a firm is no longer something people are willing to commit to.

Unless the banking industry is re-regulated and salaries for every sector are equalised and controlled, swimming against the tide may prove extremely costly for them in the short term...and would shareholders for the bank respond to the risk inherent in this strategy?

There is a strong argument that Jenkins is serving the interests of shareholders in one of the most important ways he can. The moral high ground is easy to identify, but it is significantly harder to climb the slope of change without good generals.

Do you think Jenkins is in the right, or are bonuses for already well-paid jobs having a negative impact on the industry? Leave your thoughts and opinions below.

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