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2011: What went up and what went down in the Nordic financial services job market?

Image via Wikipedia

Image via Wikipedia

Based on conversations with specialist financial services recruiters and our own research, here’s our considered opinion on how 2011 panned out in the Nordic region.

2011 was a good year for:

Risk and compliance

The impact of Basel III and the continuing focus on regulatory compliance, capitalisation and risk management all meant compliance and risk hiring was definitely active in 2011, argues Wictor Bonde, senior consultant, banking and financial services, at Michael Page International in Stockholm.

“Compliance has been an especially hot area and recruitment increased by leaps and bounds during the year as the Swedish Financial Services Authority, Finansinspektionen, introduced new regulations that, in turn, forced financial institutions to invest in this area,” he explains.

“The function has also transformed from a strictly ‘legal report function’ to one where organisations realise that, since they have to have these persons on board anyway, it makes sense for them to have business focus and experience as well as specific regulatory and compliance expertise. So we have seen candidate profiles changing and more financial institutions looking for a wider range of experience, for example having a background in or experience of trading,” he adds.

Private banking and wealth management

SEB in May revealed it had been expanding its private banking and wealth management operations, while, later in the year Credit Suisse pointed out that Norway and Sweden were now among the richest in the world in terms of average wealth per adult.

This, in turn, was helping to fuel demand for private banking and providing opportunities for smaller, boutique operators, with, for one, Swedish asset management firm Catella in May buying wealth manager EKF Enskild Kapitalförvaltning and renaming it Catella Förmögenhetsförvaltning.

Appetite for recruitment

Everything is relative, and while the overall numbers of jobs in the Nordic financial sector was on the decline, as we point out below, companies’ appetite to hire definitely increased in 2011 compared to recent years.

“Overall, despite the challenges, 2011 has been a great year for recruitment, and certainly a distinct improvement from recent years. The banks are generally, slowly moving towards ‘tighter’, more efficient organisational models and structures and are expected to have good profits from areas such as housing and lending,” he explains.

“Moreover, in turbulent times there are always opportunities for skilled recruitment professionals, since it is of extra importance that whatever hiring is made, whether that is adding a team or not, is successful,” he adds.

But the picture is not consistent across the region. “The recruitment markets have been a lot more quiet than was the case a year ago or even at the beginning of this year,” says Erkki Tuominen, managing partner at CV Group in Helsinki.

“Many of the Finnish banks are laying people off. The only recruitments we have seen are either replacements or those that are focusing on developing the banks’ risk management units,” he adds.

And 2011 was a bad year for:

Job security

Despite the relative health of the Nordic economies compared with many of their European counterparts, the year was marked by a steady stream of redundancy announcements.

Danske and Nordea said they would be cutting 2,000 jobs apiece and Swedbank in December admitted it would be losing 300 jobs in Sweden and the same number in the Baltics.

Albeit at a much smaller level, 100 jobs were lost at Carnegie Investment Bank and around 250 at Danish bank Jyske.

In Swedbank’s case the move was particularly ominous as its Large Corporates and Institutions business area is expected to see cuts as well as among retail, administration and support roles.

“Up to the spring people were quite optimistic but since the autumn, while people have not been pessimistic as such, there has definitely been more caution in the air,” says Nina Linander, partner at the Stockholm office of Stanton Chase International.

Danish banks

If you had to single out a weak spot in the Nordic banking sector in 2011 it would be Denmark.

In May the rating agency Moodys downgraded six Danish lenders, including Danske Bank, which announced a slew of redundancies as did its much smaller rival Jyske Bank. Danske warned a further 1,500 roles could be lost in coming years.

The year saw Henning Kruse Petersen, chairman of Denmark’s Financial Stability Company, make the gloomy prediction that 75 of the country’s 90 local banks will need to disappear if the financial sector is ever to regain its feet.

The year, too, saw smaller Danish banks Amagerbanken and Fjordbank Mors run into trouble..

Danske chief executive Peter Straarup in November predicted things would be unlikely to improve soon, arguing the Danish economy was set to grow at a slower pace than the eurozone, “whereas the other Nordic economies are likely to see higher growth rates”.

Bonuses and pay

Much as they have been since the 2007/08 meltdown, bonuses and pay remained under pressure in the Nordics during 2011.

In October, for example, Swedbank admitted to cutting quarterly variable remuneration in its Large Corporates & Institutions division by 88%, while in the same month Nordea said performance-related pay there would be reined in for the foreseeable future, while chief executive Christian Clausen in July predicted it would “keep costs largely unchanged for a prolonged period of time”.

SEB, in turn, gave off a similiar sentiment during the year, with president Annika Falkengren saying in November that the bank’s ambition to cap costs, at SEK24bn for this year, was being extended to 2014.

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