Rather obviously, the financial services recruitment market has taken a turn for the worse over the last month. Most banks have rolled out redundancy programmes and those that haven’t are either freezing or keeping a very close eye on hiring.

Most reports have focused on the potential cuts to front office functions within investment banking, but is the picture so grim across the gamut of financial services functions?

Ranstad Financial & Professional (previously Joslin Rowe) focuses on middle and back office recruitment, as well as other support functions, and Michele Bloomfield, director at the firm, insists there are still reasons for optimism.

Here’s Michele:

And here’s what she had to say:

Compared to this point in 2010, how would you sum up the current recruitment market for financial services professionals in the UK?

During the boom years, the traditional seasonal slowdown in financial services recruitment used to occur around October time. In 2010 it was noticeably early – around late August. This year the recent economic turbulence has spooked the market and brought the lull forwards a few weeks earlier again. Permanent recruitment has definitely slowed, although it’s important to stress it is continuing across the board. Contractor numbers are holding well and to some extent it looks as though some permanent hiring is morphing into temporary recruitment opportunities instead. This is also a trend we would usually expect as we head towards the end of the year.

A number of financial services companies have announced both job cuts and hiring freezes recently, is it really that bleak?

It’s worth remembering that financial services has always been an incredibly responsive industry. We’ve been in operation since 1982 and our clients have always made cuts at any sign of prolonged trouble. However, this reactionary window has narrowed further since the credit crunch. Financial services firms learned many lessons in the last few years and now, at the first sign of any economic upset, the sector immediately moves with extreme caution. It’s too soon to tell whether this latest dip on the economic roller coaster (and the accompanying freezes) is the sign of a continuing trend or just a momentary hiatus. However, it does feel far less bleak than 2008 and 2009, so job seekers shouldn’t panic unduly.

Where are the bright spots?

There are plenty of recruitment hot spots in investment banking and these are typically around change management, risk, control and clearing positions or those opportunities tied to regulatory change. It’s worth pointing out that even during the last fortnight good candidates have continued to receive multiple offers and buy backs. A good barometer is also the number of financial services clients who are still hiring PAs, desk assistants and trading floor secretaries and this is continuing strongly.

Are there any expansionary areas?

Within the wider financial services sector, roles around payment protection insurance (PPI) is a huge growth area and this is likely to continue for a number of years.

When do you envisage a recovery in the job market taking place?

2011 has been the ‘recovery’ year so far and a few weeks of difficulties won’t necessarily derail this. However, we’ll have a clearer idea in September as to whether the lull we’re experiencing is just a blip or a downwards trend that will need another period of sustained recovery again.

What advice can you give to job-seekers in a difficult market?

The reality is clients only want to hire the absolute best so it’s important to spend time on your CV and on your interview preparation. Rather like investors buying gold during tough times as a ‘flight to quality’, so too do hiring managers gravitate towards top talent.