Hiring Intentions for UK Financial Services Sector Q1 2013


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Whilst the prolonged period of uncertainty and upheaval isn’t quite over, the UK financial services industry appears to be returning to a sentiment of cautious optimism.

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Hiring Intentions for UK Financial Services Sector Q1 2013

  1. 1. hiring intentionsour Q1 2013 update for the UK financial services sector
  2. 2. 2 hiring intentions – our Q1 2013 update for the UK financial services sector
  3. 3. welcome toour Q1 update Tara RicksWhilst the prolonged period of uncertainty As a specialist recruitment agency with over 30and upheaval isn’t quite over, the UK financial years experience, we understand the difficultyservices industry appears to be returning to a our clients face when searching for the rightsentiment of cautious optimism. A view shared candidate. Our wealth of experience, dexteritywidely amongst the individuals we surveyed, and market knowledge opens the door to athis positivity can be attributed to a number of pool of the finest talent, including ‘hibernatingconverging factors. Improved macroeconomic candidates’ who are not actively seeking a newindicators, better-than-expected company role. Our expertise can meet your recruitmentresults, stronger demand, and a recovering needs or complement your direct resourcingstock market all contribute to the prevailing initiatives.buoyant mood. Once-terrifying words like‘Grexit’ and ‘fiscal cliff’ have been put to bed Time will tell if 2013 will be seen as a year of– for now. Even the appointment of Mark convalescence but the confidence expressedCarney, the first ever non-British governor at by our clients demonstrates a resilience shownthe Bank of England, appears to have lifted across the industry. We welcome the resultsspirits. of this survey and are committed to delivering unsurpassed recruitment solutions.One of the outcomes of this optimism is ananticipated increase in permanent recruitment With best wishes for a successful andactivity in 2013. Our evidence suggests that prosperous year ahead,many companies are expecting to hire morestaff whether it is to meet demand or tocomply with new regulations. In the main ourclients foresee two main obstacles to securingtalent over the year: budget constraintsand headcount approval, and the limitedavailability of suitable talent. While an uplift in Tara Ricksbusiness confidence may help with the former, Managing Directorit is our expertise that will assist with the latter. Randstad Financial & Professional Key findings from our survey • 71% believe 2013 will be a better year for their company than 2012 • Anticipated increase in permanent hiring • The key challenge this year will be to source quality candidates * Survey of 208 respondents from asset management, investment banking, asset servicing and insurance in London and Scotland conducted in December 2012. hiring intentions – our Q1 2013 update for the UK financial services sector 3
  4. 4. is there an improved outlook in 2013? Key findings overview • 70.9% believe that 2013 will be better than 2012 Yes 29.1% No 70.9% Our view It is reassuring that almost 71% of were compelled to implement during the respondents believe that 2013 will be a turmoil of recent years. We believe that an better year for their business than 2012. increase in recruitment activity is linked with Although this is a broad statement we feel stronger business performance; aggregated this figure underlines a returning sentiment hiring intentions are a bellwether for a wider of cautious optimism to the sector. External recovery. By examining the expectations of factors such as improved macroeconomic hiring managers for the year ahead we identify conditions and a recovering stock market are the factors behind this optimism and the playing a role. Companies are also reaping challenges anticipated on the road ahead. the rewards of internal efficiencies they Client comments from the survey: “Same as 2012 – tough – but with growth” “The economy is looking up” “I’m confident this year will be better”4 hiring intentions – our Q1 2013 update for the UK financial services sector
  5. 5. increased headcount in 2012Key findings overview• 55% noted an increased headcount over 2012, less than 16% said their headcount decreased• Offshoring of some banking functions accounts for some of these increases 1.9% Increased by more than 25% 5.8% Increased by between 10% - 24% 10.7% 8.2% Increased by 1% - 9% No change 15.4% Decreased by between 1% - 9% Decreased by between 10% - 24% 29.1% Decreased by more than 25% 28.9%Our viewIncreased headcount in 2012 presents an demand is bubbling away for many of ourinteresting picture. In the wake of company clients. There is an expectation that manyrestructuring and shifting strategies, internal contract roles will become permanent duringmobility has become more prevalent. So while 2013, subject to overall performance andheadcount of a particular division may have company-wide recruitment strategies.increased this isn’t necessarily indicative of thecompany as a whole. Expansion of offshore Encouragingly an optimistic foundation hasteams was also mentioned here by many been laid for the year ahead in the UK, evenrespondents so while this may contribute to if an air of caution remains. Companies haveoverall company profitability, it shouldn’t be been evolving and innovating to succeed inmistaken for a recovery in the UK financial a competitive market. We will continue toservices sector. The picture isn’t entirely bleak: monitor headcount trends amongst our clientsreal growth driven by a rise in customer as a litmus test of wider industry performance. Client comments from the survey: “Things will be busier due to increasing client demand” “Businesses are innovating and are introducing new revenue streams which adds to the confidence we are feeling” hiring intentions – our Q1 2013 update for the UK financial services sector 5
  6. 6. expectations for the year ahead - will headcounts continue to grow in 2013? Key findings overview • 57.7% of respondents feel headcount in their business will grow in 2013 • Of those anticipating growth, almost a quarter expect it will be significant in scale • 24.9% believe there will be no change; 17.4% expect a decrease 3.3% 13.7% 14.1% Increase significantly Increase slightly No change Decrease slightly 24.9% 44% Decrease significantly Our view We believe that improved market conditions competitive market requires companies to be encourage a confidence to recruit new ever more precise and agile when recruiting. staff. The 57% of respondents expecting Until stronger confidence returns to the an increase in headcount, compared to just sector, top talent is likely to remain dormant 17% foreseeing a decline, can be seen as a or seek career advancement through internal barometer of the optimism filtering through promotion. This presents a challenge to hiring the sector. When adding new headcount managers as rival firms vie for the limited or replacing outgoing staff, the highly number of available, high-calibre candidates. Client comments from the survey: “We need fresh blood to take us where we want to go; this hasn’t been possible in the last few years” “Mid-year requirements in regulatory reporting, risk and clearing may increase headcount”6 hiring intentions – our Q1 2013 update for the UK financial services sector
  7. 7. permanent or contractor mix –will there be a change in 2013?Key findings overview• 35.6% believe permanent recruitment will be higher in 2013• 55.2% are unsure or see no change ahead• 9.2% foresee an increase in use of contractors Increase in ratio of permanent 35.6% recruitment compared to 2012 55.2% Increase in ratio of contractor recruitment compared to 2012 No change 9.2%Our viewWhile the majority expecting to maintain improving remains subject to debate butthe status quo alludes to a continuing air of a significant number of our respondentscaution, the ratio in favour of permanent feel that when talent is recruited, it will berecruitment over contract placements suggests on a permanent basis. This longer terman optimistic sentiment. In 2012, some commitment to headcount indicates thatheadcounts increased with contract and client demand is expected to stabilise and eventemporary roles. A growing number, business grow over the year. We are encouraged thatperformance-permitting, are expected to only 9% of respondents felt there will be anbecome permanent positions during 2013. increase in contractor reliance, often requiredWhether the macroeconomic landscape is for short-term demands and project work. Client comments from the survey: “The team’s strong growth was made up of a mix of contract and permanent roles. With market uncertainty (in recent years) contract resource was relied on. With more confidence, these roles will turn into permanent positions.” hiring intentions – our Q1 2013 update for the UK financial services sector 7
  8. 8. challenges to recruiting Key findings overview • 38.9% struggled to find the ‘right’ candidate • 41.2% of respondents found headcount approvals and budgetary constraints to be the key challenge when recruiting • 7.5% felt that lengthy recruitment processes hindered their hiring activity • 4.8% faced changing business needs during the recruitment process 4.8% 3.8% 7.5% Unreasonable expectations from candidates Lengthy recruitment process Headcount approvals and budget Strong competition for candidates 38.9% The ‘right’ candidate not available 41.2% Changing business needs Our view 3.8% Two key themes dominated our respondents Professionals are still showing a reluctance views on the challenges faced when to seek new opportunities, choosing instead recruiting new staff: budgetary constraints to stay in their current positions or move and headcount approval, and finding the internally. This ‘hibernation’ from the job ‘right’ candidate. market has been attributed to the enduring difficulties in the economy. A widely held view These factors are often out of a hiring of many professionals is that moving to a new manager’s control but trying to align them is company no longer guarantees increased crucial and increasingly difficult in the current earning potential, or other non-monetary climate. The elusive ‘right’ candidate may be benefits. Should the optimism expressed in found but by the time approval is granted, the our findings come to fruition, companies will candidate may have already accepted an offer be able to offer more competitive packages from a competitor. and professionals will become more receptive to them. Client comments from the survey: “Training on the product is always provided, so the skill set is less important. It’s the attitude and soft skills of people joining our team that we look for. You can’t teach team fit.”8 hiring intentions – our Q1 2013 update for the UK financial services sector
  9. 9. will resignations be a factorin the first half of 2013?Key findings overview• 70.3% felt resignations will not be a factor in the first six months of 2013 29.7% Yes 70.3% NoOur viewEven in a bullish climate, professionals in the Natural attrition is unavoidable, but strategicfinancial services industry tend to defer their changes or restructuring can greatly impactsearch while their company approaches the the shape and size of teams. Marketend of bonus and incentive cycles. In a bearish intelligence suggests that merger andclimate internal mobility is a safer route for acquisition activity is likely to escalate in 2013.career progression until more confidence Where this triggers a wholesale change ofreturns. In the unique circumstances faced company culture, a degree of consequentialby the financial services sector, feedback staff turnover is inevitable.received shows that fresh talent from outsidethe business is essential to innovate andimplement new strategies. Client comments from the survey: “There will be natural attrition, but we need to replace these people with fresh blood to take our business forward” “There will be some internal mobility – there always is. Compensation will always make people move; they think they’re missing out. The likelihood is they aren’t” “When people leave, we need fresh thinking and fresh enthusiasm for the challenge ahead” hiring intentions – our Q1 2013 update for the UK financial services sector 9
  10. 10. the impact of regulation on financial services businesses in 2013 Key findings overview • 19.8% believe that regulation will affect their business in 2013 • 36.4% believe it won’t have any impact at all • 43.8% are maintaining a ‘wait and see’ approach 19.8% Yes 43.8% No Unsure 36.4% Our view Almost 20% of respondents believe that higher rates of attrition. A sentiment expressed ongoing regulatory changes will further impact by a significant number of respondents was their business in 2013. Whether the changes a lack of visibility as to the eventual impact will create more work or just a new way of of ongoing regulatory change in their working will influence the hiring patterns business. Many felt they should have a better of those firms directly affected. If workloads understanding at this stage than they actually increase, current teams will either need to do and this is largely why over 43% are still in absorb the impact or be expanded. If the wait and see mode. workload is too much some fear it will lead to Client comments from the survey: “Regulation is increasing, but its impact will take time to settle” “I’m not as directly affected due to my client base. But I am constantly monitoring the situation” “Increased regulatory demands on the finance industry will increase workloads”10 hiring intentions – our Q1 2013 update for the UK financial services sector
  11. 11. building the perfect team is acritical factor for success in 2013With 57% of our respondents indicating their If you want to find the best person ‘in theheadcount will increase to some extent in market’ and not just the best person ‘on the2013, the results of our survey demonstrate a market’ then the only way to do this is throughshared optimism about an improving climate the extensive network of an experiencedin financial services, despite wider talk of a market specialist. For a hiring manager, there is‘triple dip’. no substitute for a trusted recruiter. Someone that knows and understands your businessHowever it seems there are still some and represents your brand in the marketplace,significant barriers for hiring managers providing you access to their relationships withattempting to build the perfect team. As the best suited candidates for your role. Thesebudget constraints and headcount approval are relationships that have been forged overease with improving confidence, the age old years and reveal a deeper understanding ofproblem remains: finding the ‘right’ person a candidate, rather than simply matching anwho not only has the required skill set but fits online CV to your job specifications.with the team and the company culture. The financial services sector continues toGiven the seeming ease of direct hire evolve in 2013 and the best recruiters mustnowadays with the proliferation of in-house evolve with it. At Randstad Financial &recruiters using tools such as LinkedIn, it is Professional we continue to build on ourinteresting that 38.9% of our respondents thirty year heritage as Joslin Rowe and strivestill felt they couldn’t find the ‘right’ person. to provide the best service for our clients. OurWe believe that this clearly highlights the survey tells us that the approach of listeningimportance of working with a trusted to our clients’ needs and building personalexternal recruiter. relationships with the best candidates remains the best way to build the perfect team.We wish you all the best for a successful 2013. If you want to find out more aboutworking with Randstad Financial & Professional then don’t hesitate to contact usLondon ScotlandTom Forrest Margaret DyerT: +44 (0) 207 786 6466 T: +44 (0) 141 202 2812E: tom.forrest@randstadfp.com E margaret.dyer@randstadfp.comMichele BloomfieldT: +44 (0) 207 786 6452E: michele.bloomfield@randstadfp.com hiring intentions – our Q1 2013 update for the UK financial services sector 11
  12. 12. Randstad Financial & Professional London 85 London Wall London EC2M 7AD T: +44 (0) 207 786 6900 E: welcome@randstadfp.com Edinburgh 45 Charlotte Square Edinburgh EH2 4HQ T: +44 (0) 131 225 8188 E: edinburgh@randstadfp.com Glasgow 175 West George Street Turnberry House Glasgow G2 2LB T: +44 (0) 141 202 2812 E: glasgow@randstadfp.comwww.randstadfp.com