UK Financial Services Sector Hiring Intentions Q1 2013

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hiring intentionsour Q1 2013 update for the UK financial services sector


2/12hiring intentions our Q1 2013 update for the UK financial services sector2


3/12hiring intentions our Q1 2013 update for the UK financial services sector 3

Whilst the prolonged period of uncertaintyand upheaval isnt quite over, the UK financialservices industry appears to be returning to asentiment of cautious optimism. A view sharedwidely amongst the individuals we surveyed,this positivity can be attributed to a number ofconverging factors. Improved macroeconomicindicators, better-than-expected companyresults, stronger demand, and a recoveringstock market all contribute to the prevailingbuoyant mood. Once-terrifying words likeGrexit and fiscal cliff have been put to bed for now. Even the appointment of MarkCarney, the first ever non-British governor atthe Bank of England, appears to have liftedspirits.

One of the outcomes of this optimism is ananticipated increase in permanent recruitmentactivity in 2013. Our evidence suggests thatmany companies are expecting to hire morestaff whether it is to meet demand or tocomply with new regulations. In the main our

clients foresee two main obstacles to securingtalent over the year: budget constraintsand headcount approval, and the limitedavailability of suitable talent. While an uplift inbusiness confidence may help with the former,it is our expertise that will assist with the latter.

As a specialist recruitment agency with over 30years experience, we understand the difficultyour clients face when searching for the rightcandidate. Our wealth of experience, dexterityand market knowledge opens the door to apool of the finest talent, including hibernatingcandidates who are not actively seeking a newrole. Our expertise can meet your recruitmentneeds or complement your direct resourcinginitiatives.

Time will tell if 2013 will be seen as a year ofconvalescence but the confidence expressedby our clients demonstrates a resilience shownacross the industry. We welcome the resultsof this survey and are committed to deliveringunsurpassed recruitment solutions.

With best wishes for a successful andprosperous 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.



It is reassuring that almost 71% ofrespondents believe that 2013 will be abetter year for their business than 2012.Although this is a broad statement we feelthis figure underlines a returning sentimentof cautious optimism to the sector. Externalfactors such as improved macroeconomicconditions and a recovering stock market areplaying a role. Companies are also reaping

the rewards of internal efficiencies they

were compelled to implement during theturmoil of recent years. We believe that anincrease in recruitment activity is linked withstronger business performance; aggregatedhiring intentions are a bellwether for a widerrecovery. By examining the expectations ofhiring managers for the year ahead we identifythe factors behind this optimism and thechallenges 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

Im confident this year will be better



No change

Decreased by between 1% - 9%

Decreased by between 10% - 24%

Decreased by more than 25%

increased headcount in 2012Key findings overview

55% noted an increased headcount over 2012, less than 16% said theirheadcount decreased

Offshoring of some banking functions accounts for some of these increases

Increased headcount in 2012 presents aninteresting picture. In the wake of companyrestructuring and shifting strategies, internalmobility has become more prevalent. So whileheadcount of a particular division may haveincreased this isnt necessarily indicative of thecompany as a whole. Expansion of offshoreteams was also mentioned here by manyrespondents so while this may contribute to

overall company profitability, it shouldnt bemistaken for a recovery in the UK financialservices sector. The picture isnt entirely bleak:real growth driven by a rise in customer

demand is bubbling away for many of ourclients. There is an expectation that manycontract roles will become permanent during2013, subject to overall performance andcompany-wide recruitment strategies.

Encouragingly an optimistic foundation hasbeen laid for the year ahead in the UK, evenif an air of caution remains. Companies have

been evolving and innovating to succeed ina competitive market. We will continue tomonitor headcount trends amongst our clientsas 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%


Things will be busier due to increasing client demand

Businesses are innovating and are introducing new revenue streams which adds to theconfidence we are feeling

Our view




We need fresh blood to take us where we want to go; this hasnt 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?


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 newstaff. The 57% of respondents expectingan increase in headcount, compared to just17% foreseeing a decline, can be seen as abarometer of the optimism filtering throughthe sector. When adding new headcountor replacing outgoing staff, the highly

competitive market requires companies to be

ever more precise and agile when recruiting.Until stronger confidence returns to thesector, top talent is likely to remain dormantor seek career advancement through internalpromotion. This presents a challenge to hiringmanagers as rival firms vie for the limitednumber of available, high-calibre candidates.

44%24.9%

13.7%

3.3%

14.1%

Decrease significantly

Our view



Increase in ratio of permanentrecruitment compared to 2012

Increase in ratio of contractorrecruitment compared to 2012

No change

permanent or contractor mix will there be a change in 2013?


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 maintainthe status quo alludes to a continuing air ofcaution, the ratio in favour of permanent

recruitment over contract placements suggestsan optimistic sentiment. In 2012, someheadcounts increased with contract andtemporary roles. A growing number, businessperformance-permitting, are expected tobecome permanent positions during 2013.Whether the macroeconomic landscape is

improving remains subject to debate buta significant number of our respondentsfeel that when talent is recruited, it will be

on a permanent basis. This longer termcommitment to headcount indicates thatclient demand is expected to stabilise and evengrow over the year. We are encouraged thatonly 9% of respondents felt there will be anincrease in contractor reliance, often requiredfor short-term demands and project work.

35.6%

9.2%

55.2%


The teams strong growth was made up of a mix of contract and permanent roles. With marketuncertainty (in recent years) contract resource was relied on. With more confidence, these roles willturn into permanent positions.

Our view



Unreasonable expectations from candidates

Lengthy recruitment process

Headcount approvals and budget

challenges to recruitingKey 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 respondentsviews on the challenges faced whenrecruiting new staff: budgetary constraintsand headcount approval, and finding theright candidate.

These factors are often out of a hiring

managers control but trying to align them iscrucial and increasingly difficult in the currentclimate. The elusive right candidate may befound but by the time approval is granted, thecandidate may have already accepted an offerfrom a competitor.

Professionals are still showing a reluctanceto seek new opportunities, choosing insteadto stay in their current positions or moveinternally. This hibernation from the jobmarket has been attributed to the enduringdifficulties in the economy. A widely held viewof many professionals is that moving to a new

company no longer guarantees increasedearning potential, or other non-monetarybenefits. Should the optimism expressed inour findings come to fruition, companies willbe able to offer more competitive packagesand 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%


Training on the product is always provided, so the skill set is less important. Its the attitudeand soft skills of people joining our team that we look for. You cant teach team fit.

Our view




There will be natural attrition, but we need to replace these people with fresh blood to take our businessforward

There will be some internal mobility there always is. Compensation will always make people move; theythink theyre missing out. The likelihood is they arent

When people leave, we need fresh thinking and fresh enthusiasm for the challenge ahead

will resignations be a factorin the first half of 2013?


70.3% felt resignations will not be a factor in the first six months of 2013

Even in a bullish climate, professionals in thefinancial services industry tend to defer theirsearch while their company approaches theend of bonus and incentive cycles. In a bearishclimate internal mobility is a safer route forcareer progression until more confidencereturns. In the unique circumstances facedby the financial services sector, feedbackreceived shows that fresh talent from outsidethe business is essential to innovate andimplement new strategies.

Natural attrition is unavoidable, but strategicchanges or restructuring can greatly impactthe shape and size of teams. Marketintelligence suggests that merger andacquisition activity is likely to escalate in 2013.Where this triggers a wholesale change ofcompany culture, a degree of consequentialstaff turnover is inevitable.

Yes

No

29.7%

70.3%

Our view




Regulation is increasing, but its impact will take time to settle

Im 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 onfinancial services businesses in 2013


19.8% believe that regulation will affect their business in 2013 36.4% believe it wont have any impact at all 43.8% are maintaining a wait and see approach

Almost 20% of respondents believe thatongoing regulatory changes will further impacttheir business in 2013. Whether the changeswill create more work or just a new way ofworking will influence the hiring patternsof those firms directly affected. If workloads

increase, current teams will either need toabsorb the impact or be expanded. If theworkload is too much some fear it will lead to

higher rates of attrition. A sentiment expressedby a significant number of respondents wasa lack of visibility as to the eventual impactof ongoing regulatory change in theirbusiness. Many felt they should have a betterunderstanding at this stage than they actually

do and this is largely why over 43% are still inwait and see mode.

Yes

No

Unsure

19.8%

36.4%

43.8%

Our view



building the perfect team is acritical factor for success in 2013

With 57% of our respondents indicating theirheadcount will increase to some extent in2013, the results of our survey demonstrate ashared optimism about an improving climatein financial services, despite wider talk of atriple dip.

However it seems there are still somesignificant barriers for hiring managersattempting to build the perfect team. Asbudget constraints and headcount approvalease with improving confidence, the age oldproblem remains: finding the right personwho not only has the required skill set but fitswith the team and the company culture.

Given the seeming ease of direct hirenowadays with the proliferation of in-houserecruiters using tools such as LinkedIn, it isinteresting that 38.9% of our respondentsstill felt they couldnt find the right person.We believe that this clearly highlights theimportance of working with a trustedexternal recruiter.

If you want to find the best person in themarket and not just the best person on themarket then the only way to do this is throughthe extensive network of an experiencedmarket specialist. For a hiring manager, there isno substitute for a trusted recruiter. Someonethat knows and understands your business

and represents your brand in the marketplace,providing you access to their relationships withthe best suited candidates for your role. Theseare relationships that have been forged overyears and reveal a deeper understanding ofa candidate, rather than simply matching anonline CV to your job specifications.

The financial services sector continues toevolve in 2013 and the best recruiters mustevolve with it. At Randstad Financial &Professional we continue to build on ourthirty year heritage as Joslin Rowe and striveto provide the best service for our clients. Oursurvey tells us that the approach of listeningto our clients needs and building personalrelationships with the best candidates remainsthe 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 aboutworking with Randstad Financial & Professional then dont hesitate to contact us


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www.randstadfp.com

Randstad Financial & Professional

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LondonEC2M 7AD

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UK Financial Services Sector Hiring Intentions Q1 2013

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