The family offices study was based on responses from 347 firms around the world.
Single and multi-family office executives and staff based in the Middle East and Europe enjoyed the largest percentage gains in salary and bonuses in the past 12 months. And “hybrid” working patterns that were prompted by the pandemic remain in place – albeit with some wrinkles – a study shows.
SFOs and MFOs continue to wrestle with acquiring top-notch talent from a limited pool and demands for a more flexible working environment. These are among takeaways from Botoff Consulting in its 2024 Compensation and Talent Planning Report. Producers of the report collaborated with Linda Mack, of Mack International, and Mark Somers, of the Somers Partnership. The study was based on responses from 347 firms. The lion’s share of responses (75 per cent) were from the Americas (mostly the US, but also those from Canada, Mexico, Central America, and South America); Europe (22 per cent), Asia-Pacific and Middle East (both 3 per cent).
There is a spread in bonuses for executives, depending on the region. For example, 80 per cent of Asia-Pacific family office executives had or are about to get a higher bonus; 67 per cent of those in the Middle East were paid a higher bonus. For the US and Europe, the figures are 26 per cent and 32 per cent, respectively.
Executive salaries in family offices rose strongest in Asia-Pacific – surging 50 per cent over the past 12 months, with Middle East organisations in second place (40 per cent); Europe up by 17 per cent and the US rising 15 per cent. Among staff in family offices, the Middle East logged the largest rises for salaries, rising 20 per cent; APAC was 17 per cent; Europe up 11 per cent and the US was up 16 per cent.
Looking forward, 60 per cent of Asia-Pacific family offices expect to boost executive salaries by 5 per cent or more, while 40 per cent of Middle East respondents aim to do so. Some 58 per cent of European family offices expect to make such a change.
These findings show how the family office sector is rising fast in Asia and the Middle East on the back of new wealth and a need for structures to handle generational wealth transfer. Singapore, Hong Kong, Dubai, and Abu Dhabi, for example, are competing as family offices/wealth management hubs, taking the fight to traditional centres such as Switzerland.
Home or office?
In Europe, 73 per cent of organisations said staff work in an office at least three days a week; in the Americas (mostly the US), the figure is 76 per cent, and the Middle East and Asia-Pacific, 75 per cent go for a hybrid approach of in-office and work-from-home, and 25 per cent compel people to work in an office.
Family offices know they must set attractive working conditions if they want to get the best talent, Mark Somers (mentioned above), told this news service.
“A point to consider is that family offices don’t have brands; they are discreet, often rather nebulous organisations – candidates will know little to nothing about them before we fully brief them after signing an NDA. To differentiate themselves in this competitive family office talent market, we help family offices think about and articulate thoughtful working conditions. This is their ‘employer value proposition – EVP',” Somers said.
An important finding from the report was that just under half of family offices said they faced challenges recruiting staff. In today’s industry, “talent is very international,” Somers said. Another concern for family offices is the location of talent and the challenge of finding people in specific regions of countries – a talent and geographical challenge requiring a specialised retained search firm. Somers gave the case of his firm concurrently working for two family office mandates, one based in Monaco and the other in the West Midlands.
In other details, the report showed that in the Americas, 48 per cent of family offices raised executives’ salaries by 5 per cent or more; 41 per cent said staff received pay rises. Some 27 per cent said bonuses would be higher in 2024 than a year ago; 55 per cent reported no significant changes. In Europe, 58 per cent reported executive pay rises of 5 per cent or more. Some 54 per cent of European executives said they expected pay rises to be comparable with those in 2023.
Within Asia-Pacific, 60 per cent of family office executives reported pay hikes of 5 per cent or more; the same share of staff in family offices gave the same result. In the Middle East, 40 per cent of executives said there were 5+ per cent pay hikes, with the same figure applying to staff.
Elsewhere, 36 per cent of respondents in the Americas said they have faced challenges in hiring staff; in Europe, the result is 45 per cent; in Asia and Middle East, the result is also 45 per cent.