Abrdn, the Edinburgh-headquartered asset manager, has brought forward a pay increase for around half of its 5,000 strong global workforce to ease the cost-of-living crisis, joining a handful of financial services firms that are supporting employees with rising household bills.
“We’ve brought forward the pay round for 2023 to October,” Stephen Bird told journalists on a call following the asset manager’s first half results on 9 August.
“I’ve announced that for our colleagues who earn less than £75,000 — they will be having their pay rise brought forward to October to alleviate the cost of living concerns.”
Bird, who took over as CEO of the FTSE 100-listed asset manager in September 2020, told Financial News the decision was made after the cost-of-living crisis was raised during coffee mornings he holds with staff on a regular basis.
“I was looking at the impact of rising fuel bills particularly on the folks lower down the pay scale,” said Bird.
“I got questions about how we were thinking about the impact. I sat down with HR and told them we needed to focus our resources where we could have the most impact. We need people focused on their jobs, not worrying about paying the gas bill.”
Around 50% of Abrdn’s 5,000 staff worldwide will receive an increase in pay, according to a spokesperson for the firm.
Bird said he opted to bring forward pay increases over awarding one-off handouts to staff — a move favoured by some other financial services firms.
“It looks to me like gesturing rather than properly addressing the issue. An increase is a much more material thing,” said Bird.
The move by Abrdn, which swung to a £320m loss for the first half of the year, comes after HSBC announced this month it would pay £1,500 to around 17,000 of its UK employees.
NatWest, Lloyds Banking Group and Barclays have also announced one-off payments to staff to help with the rising cost of living.
The Bank of England said on 4 August that inflation could hit 13% and trigger a prolonged recession after it raised the base rate by 0.5 percentage points to 1.75% — its biggest increase in 27 years.
Some asset managers have implemented changes to staff remuneration as inflation soars to levels not seen in 40 years.
Liontrust, the £34.2bn asset manager, told Financial News it gave staff an “enhanced pay rise” earlier this year as a result of rising inflation.
“Given that this follows the challenges of two years of Covid and the associated lockdowns, Liontrust has also introduced a monthly payment for staff to spend on their positive well-being, which can be on their physical or mental health,” a spokesperson said for the firm.
Others are watching the situation closely before announcing any changes.
“We are very conscious of cost-of-living increases that are affecting staff which we will take into consideration as we enter our usual end-of-year compensation process,” said a spokesperson for Fidelity International.
Meanwhile, a spokesperson for M&G said: “As part of our annual salary review we consider a broad range of factors including the economic environment our colleagues are experiencing, but have not announced any changes ahead of this.”
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