Headhunting consultancy Hedley May says the FSA must increase its annual spend on wages by 50 per cent to attract staff capable of carrying out a more interventionist regulatory approach.
In 2013, the Government will split the FSA into the Prudential Regulation Authority and the Financial Conduct Authority and both regulators are being set up to take a more interventionist approach.
Hedley May says the FSA will need to increase its wage budget from its 2010/11 spend of £329m to £490m to attract and retain quality staff.
The regulator’s budget for 2010/11 was £450m, with 73 per cent allocated to staff costs. Hedley May founding partner Nick Hedley says: “There are plenty of people in the industry we talk to who say they have thought about going to the regulator but they did not want to take the pay cut.”
In June, the FSA announced that annual staff turnover more than doubled to 10.4 per cent in 2010/11 from 4.9 per cent in 2009/10.
In May, FSA chief executive Hector Sants said attracting the right staff will be key to the success of the new regulators and acknowledged that finding them could be a challenge.
He said: “It is not an impossible task. Individuals can be found who recognise the rewarding nature of the role in the wider sense and are attracted to the concept of public service.”