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hiring intentions our Q1 2013 update for the UK financial services sector

Hiring Intentions for UK Financial Services Sector Q1 2013

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hiring intentions our Q1 2013 update for the UK financial services sector

hiring intentions – our Q1 2013 update for the UK financial services sector 2

hiring intentions – our Q1 2013 update for the UK financial services sector 3

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. A view shared widely amongst the individuals we surveyed, this positivity can be attributed to a number of converging factors. Improved macroeconomic indicators, better-than-expected company results, stronger demand, and a recovering stock market all contribute to the prevailing buoyant mood. Once-terrifying words like ‘Grexit’ and ‘fiscal cliff’ have been put to bed – for now. Even the appointment of Mark Carney, the first ever non-British governor at the Bank of England, appears to have lifted spirits.

One of the outcomes of this optimism is an anticipated increase in permanent recruitment activity in 2013. Our evidence suggests that many companies are expecting to hire more staff whether it is to meet demand or to comply with new regulations. In the main our clients foresee two main obstacles to securing talent over the year: budget constraints and headcount approval, and the limited availability of suitable talent. While an uplift in business confidence may help with the former, it is our expertise that will assist with the latter.

As a specialist recruitment agency with over 30 years experience, we understand the difficulty our clients face when searching for the right candidate. Our wealth of experience, dexterity and market knowledge opens the door to a pool of the finest talent, including ‘hibernating candidates’ who are not actively seeking a new role. Our expertise can meet your recruitment needs or complement your direct resourcing initiatives.

Time will tell if 2013 will be seen as a year of convalescence but the confidence expressed by our clients demonstrates a resilience shown across the industry. We welcome the results of this survey and are committed to delivering unsurpassed recruitment solutions.

With best wishes for a successful and prosperous year ahead,

Tara RicksManaging DirectorRandstad Financial & Professional

welcome toour Q1 update Tara Ricks

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 4

It is reassuring that almost 71% of respondents believe that 2013 will be abetter year for their business than 2012. Although this is a broad statement we feel this figure underlines a returning sentiment of cautious optimism to the sector. External factors such as improved macroeconomic conditions and a recovering stock market are playing a role. Companies are also reaping the rewards of internal efficiencies they

were compelled to implement during the turmoil of recent years. We believe that an increase in recruitment activity is linked with stronger business performance; aggregated hiring intentions are a bellwether for a wider recovery. By examining the expectations of hiring managers for the year ahead we identify the factors behind this optimism and the challenges anticipated on the road ahead.

is there an improved outlook in 2013?

Yes

No

70.9%

29.1%

Key findings overview

• 70.9% believe that 2013 will be better than 2012

Our view

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”

hiring intentions – our Q1 2013 update for the UK financial services sector 5

No change

Decreased by between 1% - 9%

Decreased by between 10% - 24%

Decreased by more than 25%

increased headcount in 2012

Key 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

Increased headcount in 2012 presents an interesting picture. In the wake of company restructuring and shifting strategies, internal mobility has become more prevalent. So while headcount of a particular division may have increased this isn’t necessarily indicative of the company as a whole. Expansion of offshore teams was also mentioned here by many respondents so while this may contribute to overall company profitability, it shouldn’t be mistaken for a recovery in the UK financial services sector. The picture isn’t entirely bleak: real growth driven by a rise in customer

demand is bubbling away for many of our clients. There is an expectation that many contract roles will become permanent during 2013, subject to overall performance and company-wide recruitment strategies.

Encouragingly an optimistic foundation has been laid for the year ahead in the UK, even if an air of caution remains. Companies have been evolving and innovating to succeed in a competitive market. We will continue to monitor headcount trends amongst our clients as a litmus test of wider industry performance.

15.4%

1.9%

8.2%

29.1%

10.7%

28.9%

5.8%Increased by more than 25%

Increased by between 10% - 24%

Increased by 1% - 9%

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”

Our view

hiring intentions – our Q1 2013 update for the UK financial services sector 6

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”

Increase significantly

Increase slightly

No change

Decrease slightly

expectations for the year ahead - will headcounts continue to growin 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

We believe that improved market conditions encourage a confidence to recruit new staff. The 57% of respondents expecting an increase in headcount, compared to just 17% foreseeing a decline, can be seen as a barometer of the optimism filtering through the sector. When adding new headcount or replacing outgoing staff, the highly

competitive market requires companies to be ever more precise and agile when recruiting. Until stronger confidence returns to the sector, top talent is likely to remain dormant or seek career advancement through internal promotion. This presents a challenge to hiring managers as rival firms vie for the limited number of available, high-calibre candidates.

44%24.9%

13.7%

3.3%

14.1%

Decrease significantly

Our view

hiring intentions – our Q1 2013 update for the UK financial services sector 7

Increase in ratio of permanent recruitment compared to 2012

Increase in ratio of contractor recruitment compared to 2012

No change

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

While the majority expecting to maintain the status quo alludes to a continuing air of caution, the ratio in favour of permanent recruitment over contract placements suggests an optimistic sentiment. In 2012, some headcounts increased with contract and temporary roles. A growing number, business performance-permitting, are expected to become permanent positions during 2013. Whether the macroeconomic landscape is

improving remains subject to debate but a significant number of our respondents feel that when talent is recruited, it will be on a permanent basis. This longer term commitment to headcount indicates that client demand is expected to stabilise and even grow over the year. We are encouraged that only 9% of respondents felt there will be an increase in contractor reliance, often required for short-term demands and project work.

35.6%

9.2%

55.2%

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 willturn into permanent positions.”

Our view

hiring intentions – our Q1 2013 update for the UK financial services sector 8

Unreasonable expectations from candidates

Lengthy recruitment process

Headcount approvals and budget

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

Two key themes dominated our respondents views on the challenges faced whenrecruiting new staff: budgetary constraintsand headcount approval, and finding the ‘right’ candidate.

These factors are often out of a hiring manager’s control but trying to align them is crucial and increasingly difficult in the current climate. The elusive ‘right’ candidate may be found but by the time approval is granted, the candidate may have already accepted an offer from a competitor.

Professionals are still showing a reluctance to seek new opportunities, choosing instead to stay in their current positions or move internally. This ‘hibernation’ from the job market has been attributed to the enduring difficulties in the economy. A widely held view of many professionals is that moving to a new company no longer guarantees increased earning potential, or other non-monetary benefits. Should the optimism expressed inour findings come to fruition, companies will be able to offer more competitive packages and professionals will become more receptiveto them.

Strong competition for candidates

The ‘right’ candidate not available

Changing business needs

41.2%

38.9%

7.5%

3.8%4.8%

3.8%

Client comments from the survey:

“Training on the product is always provided, so the skill set is less important. It’s the attitudeand soft skills of people joining our team that we look for. You can’t teach team fit.”

Our view

hiring intentions – our Q1 2013 update for the UK financial services sector 9

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”

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

Even in a bullish climate, professionals in the financial services industry tend to defer their search while their company approaches the end of bonus and incentive cycles. In a bearish climate internal mobility is a safer route for career progression until more confidence returns. In the unique circumstances faced by the financial services sector, feedback received shows that fresh talent from outside the business is essential to innovate and implement new strategies.

Natural attrition is unavoidable, but strategic changes or restructuring can greatly impact the shape and size of teams. Market intelligence suggests that merger and acquisition activity is likely to escalate in 2013. Where this triggers a wholesale change of company culture, a degree of consequential staff turnover is inevitable.

Yes

No

29.7%

70.3%

Our view

hiring intentions – our Q1 2013 update for the UK financial services sector 10

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”

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

Almost 20% of respondents believe that ongoing regulatory changes will further impact their business in 2013. Whether the changes will create more work or just a new way of working will influence the hiring patterns of those firms directly affected. If workloads increase, current teams will either need to absorb the impact or be expanded. If the workload is too much some fear it will lead to

higher rates of attrition. A sentiment expressed by a significant number of respondents was a lack of visibility as to the eventual impact of ongoing regulatory change in their business. Many felt they should have a better understanding at this stage than they actually do and this is largely why over 43% are still in wait and see mode.

Yes

No

Unsure

19.8%

36.4%

43.8%

Our view

hiring intentions – our Q1 2013 update for the UK financial services sector 11

building the perfect team is acritical factor for success in 2013

With 57% of our respondents indicating their headcount will increase to some extent in 2013, the results of our survey demonstrate a shared optimism about an improving climate in financial services, despite wider talk of a ‘triple dip’. However it seems there are still some significant barriers for hiring managers attempting to build the perfect team. As budget constraints and headcount approval ease with improving confidence, the age old problem remains: finding the ‘right’ person who not only has the required skill set but fits with the team and the company culture. Given the seeming ease of direct hire nowadays with the proliferation of in-house recruiters using tools such as LinkedIn, it is interesting that 38.9% of our respondents still felt they couldn’t find the ‘right’ person. We believe that this clearly highlights the importance of working with a trustedexternal recruiter.

If you want to find the best person ‘in the market’ and not just the best person ‘on the market’ then the only way to do this is through the extensive network of an experienced market specialist. For a hiring manager, there is no substitute for a trusted recruiter. Someone that knows and understands your business and represents your brand in the marketplace, providing you access to their relationships with the best suited candidates for your role. These are relationships that have been forged over years and reveal a deeper understanding of a candidate, rather than simply matching an online CV to your job specifications. The financial services sector continues to evolve in 2013 and the best recruiters must evolve with it. At Randstad Financial & Professional we continue to build on our thirty year heritage as Joslin Rowe and strive to provide the best service for our clients. Our survey tells us that the approach of listening to our clients’ needs and building personal relationships with the best candidates remains the best way to build the perfect team.

London

Tom ForrestT: +44 (0) 207 786 6466E: [email protected]

Michele BloomfieldT: +44 (0) 207 786 6452E: [email protected]

Scotland

Margaret DyerT: +44 (0) 141 202 2812E [email protected]

We wish you all the best for a successful 2013. If you want to find out more about working with Randstad Financial & Professional then don’t hesitate to contact us

www.randstadfp.com

Randstad Financial & Professional

London85 London Wall

LondonEC2M 7AD

T: +44 (0) 207 786 6900E: [email protected]

Edinburgh45 Charlotte Square

EdinburghEH2 4HQ

T: +44 (0) 131 225 8188 E: [email protected]

Glasgow175 West George Street

Turnberry HouseGlasgow

G2 2LB

T: +44 (0) 141 202 2812 E: [email protected]