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eFinancialCareers recently ran a roundtable in Sydney, which was attended by 12 senior HR professionals from major domestic and international financial services institutions. In the first of a two-part report, we give you the delegates’ take on recruitment, retention and compensation. Attendees asked not to be named in this article.
Six months sure is a long time in financial recruitment circles. Cast you mind back to the previous eFC roundtable in March (or just click here to read the report). Many HR professionals opted not to attend that event – recruitment was just too sensitive a subject for them. And those who did come along were hardly in high spirits – their talk focused on fending off a surplus of hapless applicants for whom they had no jobs.
The mood this week was much more upbeat, although attendees agreed that we are still far from being back in a hiring boom.
“Our recruitment volumes are about double what they were this time last year,” remarked an attendee from a Big Four bank.
Front-office, revenue-generating roles are the current focus of most recruitment campaigns.
“In the front office, it’s new-growth hiring. In the back office, it’s mainly replacement and redeployment,” he added.
Of all the client-facing functions, the delegates cited relationship managers for both private and consumer banks as the most difficult to source. “Recruiting RMs isn’t easy. There are very few people with the right skill sets who can hit the ground running.”
There are, however, a few exceptions to the front-office emphasis. Governance-centric roles (in particular, risk, compliance and internal audit) are still in demand at most banks, while claims jobs in the insurance sector are also on the up.
No matter what the role, employers are lot more demanding in their hiring than they were a year ago. But roundtable delegates dismissed the common agency-recruiter complaint that banks have raised the recruitment bar too high and are demanding an unrealistic “perfect match” for every job.
“The financial crisis has fundamentally and rapidly changed the types of roles we are offering, so therefore the skills sets are naturally harder to find. The capability we expect is a lot higher,” explained one attendee.
The retention dimension
Foreign financial institutions in Australia are concentrating on retaining their key senior talent. And for a few high-flyers, this policy can have concrete benefits. “Counter offers are returning in the form of salary rises, job title changes, and management structure changes.”
The Big Four accounting firms haven’t had to offer such inducements to retain their junior staff. Because the financial crisis has made banking careers seem comparatively unstable, there has been a recent rise in the number of newly qualified accountants staying put, rather than defecting to the banks.
And in an encouraging sign for the employment market, Australian-owned banks say they are converting an increasing number of temporary workers – hired to staff essential projects in the wake of the financial crisis – into permanent roles at the end of their contracts. Banking IT professionals are at the forefront of this trend.
Compensation expectations
Bonus expectations are rising again. “In the first three months of the year, people thought 2009 would be so bad that they were happy just to have a job. Now they are thinking ‘surely we can’t have two bad years in a row’,” commented one panellist.
Get set for more movement in March. “This time 12 months ago, bonuses weren’t having much of an impact. But now as we get closer to bonus time, turnover might be seasonally low again in November/December, in readiness for March.”
Some international banks in Australia have recently given 20 to 50 per cent base salary rises for some senior staff. Delegates admitted that this has upset the traditionally consistent nature of Australian salary scales.
“The crunch will come in March for banks who have raised their base. It might not stop people moving. If you’re annoyed with your bonus, you don’t care so much about your base.”
Look out for the second part of this report next week, which will deal with candidates and recruitment agents.
A lot of RM, traders, portfolio managers, IT, operations, business analyst, credit analyst in the global bank do not deserve to have an increase of 20 to 50 percent particularly when they are contributors to the build up of the financial crisis for over the last five years. Particularly employees who have held the roles in IT, operations, business analysts, and credit analsyts for the last five years prior 2008. Trust me you are not missing a lot on good candidates or employees. It is better to hire fresh candidates with a few years (two years) of exposure and have skills that can be transferred. If you think that the candidates who have held a credit analyst role, trader, portfolio manager, business analyst, IT, auditor, operation for the last continuous five years in a global bank are quality candidates. Then you very wrong. There are very few of these that are of quality. Please check back who are the people who held the role for the past continuous five years and ask them how they did not see the financial crisis coming (systematic risk). Ask them further what did they do to help mitigate this risk in the bank and why the financial crisis still happened
The 20 to 50 percent increase wether you are a global bank or a domestic should be given to deserving employees. However to be honest there is no one on both domestic and global bank that deserve this given the outcome of the financial crisis. Yes we are getting out of the woods and things will get better but this does not mean they can have an increase. It is more morally sound to increase the salary of employees who have assumed the role in the front office last year (2008). Why because these people really worked hard to fix what the previous owners of the roles did not accomplished. They really put effort to correct a five year dysfunctional risk management and business culture/approach in the front office. This is true for both permanent and contract employees that started holding the front office roles in 2008. For those who started holding the roles early 2009 this is of course obvious they have to prove their worth before asking an increase.
For internal HR of the bank and agencies you always have to double check by asking the question how long did they held the role (credit analyst, busines anlayst, IT, Operation, portfolio manager, traders, RM). If the answer is 2 to 5 years. Then ask them what have they done to mitigate the looming financial crisis that happened in 2008 given that all information are in front of them in 2007. Ask them further how did they communicated and implemented the approriate solution. Asking these question is better than giving them a psychometric test. Some of these candidate even sucessfully completed a psychometric test. Again it just proves you that this test is a waste of time.
Both domestic and global bank are culprits for paying exurbetant salary in the past and current repectively. Head and senior roles realistically should be in the band of 150k to 200k base plus super. Associate to Director senior roles between 120k to 150k base plus super. Junior roles below 120k. Head of a department paid over 200k base is exurbetant. CEO and CIO between 250k to 500k base. One to two level below this rank should be paid 150k to 250k base.