Graduate bankers are demanding starting salaries of more than £60,000 as junior workers continue to pile pressure on managers to dish out more perks amid a war for talent.
Entry-level banking analysts in the City of London can now expect to earn a base salary of £63,000 before bonuses in their first year out of university, a jump of more than a quarter on last year, according to a report from recruiter Dartmouth.
The Telegraph says it comes as the financial and professional services industries are increasingly hiking pay and offering lavish benefits in a bid to attract talent to compensate for an infamously-poor work-life balance.
JP Morgan is paying the highest base salary to graduates at £70,000, the study found.
Junior associates at City investment banks, who have four years of experience, can expect to take home a base salary of £119,000, up 14% from the prior year, and an average bonus of £107,000 on top.
Logan Naidu, Chief Executive of Dartmouth, told the Telegraph that investment banks are being forced to offer such elaborate pay rewards as they are now competing with private-equity firms for the best graduate talent, which was not the case in previous years.
He said: "Base pay has doubled in the last 10 years. There are more opportunities and people are looking at these places like training grounds. In that sense, it is more American."
Banks are scrambling to make a career at an investment bank more appealing amid fears in the industry that talented graduates are choosing to work for technology companies, which offer a better work-life balance.
Last month, Citigroup revealed that it was setting up a new office in Malaga as part of efforts to retain staff.
The Wall Street giant is hoping that the Andalusian city will offer employees a better work-life balance and help curb attrition among junior bankers as it bets that banks will need to do more than just boost pay to keep junior staff on side.
Meanwhile City law firms are also desperately trying to outbid each other when it comes to pay for new solicitors.
Akin Gump, a US firm, this week raised base salaries for its newly-qualified lawyers in London - those with two years of training - to a record £164,000.
It emerged at the end of last week that Scotland's legal sector is facing an "intense" battle to hold on to young talent with London firms reportedly offering starting salaries of up to £125,000.
Firms North of the border are struggling to hire new solicitors, according to the Law Society of Scotland, with many moving to the UK capital, where a similar shortage means that they can earn up to three times more than the salaries being offered in Aberdeen, Edinburgh and Glasgow.
Some are even able to work remotely from Scottish cities on the inflated salaries following a shift in working practices due to the pandemic.