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Financial services recruiters’ predictions for 2014: A return to expansion

Crystal ball

Financial services recruiters have been forced to diversify in order to survive in recent years, as banks’ tendency to build out internal recruitment teams and cut their hiring budgets has had a severe impact. However, while 2013 recruitment was predominantly focused on the middle office and replacement hires, this year could mark a return to both front office recruitment and firms actually building their teams for growth believe large financial services recruiters.

Andy Dallas, director, Robert Half Financial Services

“On the heels of positive economic data, financial services firms are optimistic and are confident about the UK’s growth prospects. From a recruitment standpoint, demand is returning in investment banking; brokers and asset managers continue to feel more positive; and movement is stirring in the hedge fund sector, with an increase in start-ups.

“Executives are concerned about losing top performers, so remuneration is rising, particularly in niche areas such as regulatory accounting, risk, compliance and IT security. Higher base and bonus offerings are on offer to attract permanent employees, although more and more professionals are being lured by the often rewarding compensation offered by contract or interim roles. We expect to see more candidates pursuing this option as demand continues to outstrip supply.”

Peter Milne, director of banking and financial services recruitment, Robert Walters

“As we step into 2014, there appears to be an overarching positive sentiment, as the economy recovers further and financial institutions prepare to take full advantage of this. We expect that hiring managers will be looking to secure well-rounded professionals who understand bank revenue and risk. Likewise, as regulatory pressure continues, cost-control will be high on most agendas and those skilled in cost management and engagement will find themselves in particular demand to facilitate this period of growth.

“As a result, we anticipate that salaries will remain relatively stable, however in-demand contractors, particularly within regulatory reporting, finance business partnering and derivatives valuations are likely to receive a premium when compared to 2013.”

Geoff Fawcett, director at Hays

“We were highly encouraged by the positive signs of growth within financial services in the second half of 2013 and have high expectations for 2014. At the end of the year we saw a significant increase in the number of roles registered across a number of different functions within financial services, including an unusually busy recruitment period over Christmas.

“A year ago it was all about compliance, audit and regulation change and cost saving. Whilst these areas are still busy, we are seeing more businesses recruiting for roles that support growth strategies, rather than cost saving, and an increase in investment roles. Many are also switching from hiring interims to increasing their permanent headcount, which is a significant change. It’s not yet a war for talent but skill shortages are bubbling under the surface and it will be interesting to see what shape this takes post bonus season. “

David Leithead, managing director, Michael Page Banking & Financial Services

The trend for the large banks to prioritise direct recruitment for cost reasons will continue at least for the first half of the year. However, we see a few trends emerging in 2014.

• Compliance hiring in key areas such as AIFMD, RDR, MMR will continue to be competitive;

• Large firms will press on to grow and develop anti-bribery and corruption teams;

• Major expansion of internal audit functions in many of the major banks will create considerable pressure on availability of talent in 2014 and this will cause continued wage inflation, further stoked by increasing demand from smaller firms on both sell and buy side, who are establishing functions for the first time.

The talent pool in technical areas such as IPV methodology, valuation model review, and hybrid roles in product control/trading market risk will be very limited and competition strong.

Hakan Enver, director of Financial Services at Morgan McKinley

“Our data, along with feedback from clients, suggests that whilst last year saw primarily replacement hiring as the country continued its recovery, but increased trading this year will lead to a higher level of growth hiring.

“Confidence among employees has also risen and we expect this to continue throughout 2014, giving the recruitment industry a significant boost. Asset management is one specific area we expect to grow significantly, as managers who held back last year now look to invest in new staff. We also anticipate continued regulatory driven recruitment, namely across risk, compliance and internal audit. Furthermore, project/strategy and technology will also show volume in particular on the contract/interim side.”

Robert Macleod, financial services director at Venn Group

“As with 2013, much of this year will be focused around compliance, regulation, change and risk. However, there is a sense that most of the restructuring of the major banks is complete (except potentially some of the major German banks and RBS), so profits should begin to grow again, although they’ll be nowhere near what they were pre-recession. There will be a growth in M&A activity as well as private equity investment and with this should come an increase in advisory and front office roles.”

Adrian Kinnersley, managing director at Twenty Recruitment Group

“Risk and compliance should remain very buoyant: there’s still a high demand for candidates and a shortage of supply and this should continue as the regulatory landscape remains challenging.

“There’s also been a lack of permanent hiring and junior hires made in the last few years, which has led to a shortage of supply in quality, experienced, permanent hires. This could prove interesting if the market becomes buoyant. Many professionals have moved away from the big firms to smaller organisations or away from financial services over recent years, this means there’s a possibility of a significantly candidate-short market driving up compensation as the demand increases.

“We anticipate strong technology hiring as organisations decide to invest in their tech systems rather than patching them up. This will probably be heavily contract orientated and could be an interesting market to watch as many of the major investment banks have significantly cut recruiters’ rates leading some to search for more lucrative markets.

“A lot of the major financial organisations have RPO’s (recruitment processing outfits) on-site or internal recruitment teams that will become seriously stretched and overworked if the market picks up.”

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