Finding and then keeping good staff has become increasingly difficult in the financial services sector, writes Adam Harvey

A shortage of workers in the financial services sector is causing headaches for employers as salaries surge, staff quit in pursuit of better deals and wages for new workers outstrip payments to more experienced staff.

Staff turnover is running at 20 per cent in some areas of the financial services sector, says a recent remuneration guide from Mercer. Turnover across the industry is at 15 per cent, the survey says.

While the competitive market is generating overtime in HR departments, it's good news for workers, with salary increases in the sector set to rise to 5.5 per cent in 2008, the survey said.

The financial services remuneration guide also sheds some light on the way companies are hiring and keeping staff. Paid maternity leave has increased to 26 weeks, and company cars have become a standard part of the package for senior workers.

Companies typically spend €53,000 on cars for heads of organisations, according to the survey. That's enough to give executives a choice among the BMW 1 Series, Mercedes C class, or, for the boss with a brood, a Ford Galaxy.

Many firms are running employee referral schemes, in which staff are paid bonuses if they convince others to join. The average bonus paid, says Mercer, is €2,250 for each new employee introduction.

Holidays have increased to an average of 25 days for executives, the guide says.

Some workers in the sector are apparently feeling the strain of all this extra money, leave and expensive cars.

Mercer's survey indicates that employee assistance programmes, which provide counselling to staff, are becoming a more common workplace device.

Such programmes are usually offered to all employees, with an average of five to eight sessions apparently enough to stave off any desire among staff to quit or jump ship.

It's a relatively cheap way to keep employees happy, as each session has an average cost of €48, says Mercer.

Mary McDermott, senior consultant with Mercer, said companies are "focusing on the health and wellbeing of employees against the background of increasing workplace stress".

One of the reasons for the stress could be the disparity between wages of new staff and employees. Competition is so high for fresh blood that entry-level wages have leapfrogged the packages offered to those who joined in recent years.

"As a result of a buoyant labour market in the financial services sector, frequently newer recruits are being paid in excess of those with two or three years' experience, particularly at administration and professional levels," said Ms McDermott.

"This can raise significant concerns for companies in their attempts to maintain equitable compensation packages between existing staff and new joiners."