Altus Partners Investment Professionals - Survey Results & Conclusions

Q: Do you feel your current compensation is:

Despite significantly increasing compensation across the industry in the past few years, most employees still feel they earn below the market rate. Of all salaries awarded in 2023, 46.7% felt they were at market rate, and 50.7% were below market rate. This demonstrates an ongoing disparity between salary levels and expectations. The results could also indicate the rise in pressures associated with the cost of living. To ensure employees are paid fairly and competitively, reviewing salaries yearly and adjusting accordingly is essential. Companies must also provide pay standards reflecting each job role's current labour markets and allow for nimble adjustments to attract the right talent. Market competitive compensation is critical for employee satisfaction, retention, and motivation.

Q: If you were to move, how much of a % increase would you expect to receive in your total compensation?

The results of this question have come as a surprise, especially with 65% of respondents expecting to receive a compensation increase of 20% or more. This significant rise is likely due to the current economic conditions, such as the rising cost of living, economic uncertainty, and increased competition.

As the market conditions cool, there is an expectation that compensation expectations will follow suit and adjust accordingly. We anticipate this realignment to occur over the next few years, culminating at the end of 2024 and the start of 2025. Companies should plan for a transition period as salaries are readjusted to reflect the current conditions of the marketplace. It is important to note that compensation packages may look different from what they have in the past, so employers should be prepared to adapt accordingly.

Q: What is the most attractive benefit to you when looking to move?

Flexibility is increasingly becoming the norm in the industry, and with good reason. Not only does it benefit employees, but it also can lead to improved job satisfaction and productivity. However, while flexible working is a significant priority for many employees in the sector, carry allocation remains an essential source of motivation and reward, especially for those who acknowledge the value of longer-term rewards over short-term rewards.

Unfortunately, we have found that transparency around carry has diminished over time. This can be particularly problematic at entry-level positions, where there may be little to no information about carry or other incentives that could help motivate employees at this stage. As such, there is undoubtedly an opportunity for companies to take a more proactive approach to offer employees access to carry schemes earlier in their careers.

Q: Do current market conditions make you more or less likely to leave your employer?

Survey results indicate that the current market conditions make 25% of respondents more likely to leave their employer and 34.72% less likely to leave. 40.28% reported that their intentions remained the same. This survey suggests that external economic factors can significantly impact employees' job stability and mobility decisions. Employers must be aware of these trends when developing strategies to recruit, develop, and retain talent in the current climate.

Does your current talent attraction strategy meet the evolving state of the talent market?

Talent Attraction

With the benefit of engaging with a range of sellside and buy-side professionals who represent diversity in seniority and professional and personal circumstances, we have identified common motivations that drive movement to new organisations and considerations toward such.

Commercial/ fund confidence ranks at the top of the list, where candidates who are moving either to or between buy-side firms are strictly assessing the fundraising activity of potential employers. A healthy history of fund-raising and investor returns are strong indicators, alongside the quality of portfolio companies and respective activity. Closely associated with this are the ESG and Sustainability agendas of funds, where candidates are encouraged by firms with an established strategy (or intention to develop this where it is absent) and commitment to building a dedicated team who will deliver on this strategy.

A lighter consideration, albeit still significant for some candidates, includes learning and development pathways. This is critical to candidates demanding that organisations be conscious of the active role they should play in one’s professional advancement. Candidates assess this through well-defined L&D plans; involved leaders; and the volume, nature, and quality of investment activity. Working models are the next of such considerations, where professionals greatly favour organisations that adopt a hybrid working model. Whilst Investment professionals value the importance of collaboration and inperson engagement, the opportunity to have flexibility in this regard carries a lot of weight.

Anticipated hiring 2023 – 2024

Over the coming financial year, Private Market firms will continue to afford equitable talent acquisition to grow and develop diverse teams and adapt to the changing market needs.

General Partners are increasingly under the microscope for diversified teams. Since diversity is not a one-size-fitsall approach, we want to see how organisations will further define what diversity means to them and how this will inform talent acquisition, retention, and development strategies.

Considering EU regulations informing responsible investing principles and the United Nations’ SDGs, Limited Partners are raising their demands which means that ESG and Sustainability teams will be scaling up rapidly.

Of all the investment strategies, it is said that co-investing will be distinguished as more buoyant with investment activity. As a result, we expect that co-investors will showcase most investment professional hires over the next year.

Whilst there are encouraging talent acquisition expectations, the likelihood of fundraising facing a degree of headwinds and a lengthier due diligence process depicts instances where non-critical business hires will be approached less aggressively. These non-critical hires may be regarded as those who either do not contribute to the bottom line or could be more influential in the growth of an organisation.

How can you stay competitive in an evolving hiring market?

Staying ahead of the talent demand

It is apparent that having a thoughtful talent acquisition strategy which is attentive to the evolution of the market is critical.

In this case, not only compelling remuneration structures but also exclusive variables which allow organisations to stay ahead of competitors.

Flexible working arrangements should be supported, especially where workforces are addressing gender imbalances.

Skilling and upskilling should remain an ongoing part of talent retention and talent development.

The most successful hiring strategies will however be seen in streamlined and efficient hiring processes. This ensures a greater probability of securing talent, especially those who hold unique skills and those who are the aspired employees of many.