Rex Cridland, Director at Norrie Johnston Recruitment, takes a look at the effects of the economic upturn on the financial services sector and considers what this will mean for financial recruitment in 2016.
The growth of the UK economy has been met by a vast skills shortage among those in the finance sector; the number of available positions far outnumbers the amount of candidates with the appropriate skills for each role. Indeed the UKCES Employer Skills Survey 2015, found that financial services has in fact seen the sharpest rise in skills shortages, rising from 10% in 2013 to 21% in 2015.
With this in mind, there is also growing concern among Chief Financial Officers who believe that the skills shortage will be exacerbated as organisations’ access to overseas employees is limited, following the UK government’s plans to further tighten immigration rules. Financial figureheads are in fact highlighting the need for more non-EU workers to enter the sector in order to tackle this ongoing issue.
As a result of this, the top candidates, and those with specialist capabilities, are in high demand. For instance here at NJR, we have seen a rise in the demand for niche and specialist senior finance positions such as internal audit directors, head of audit & risk in addition to a need for cyber security roles on an international basis. With candidates often in a position where they are presented with multiple offers, and with a diminishing talent pool facing clients in the sector, organisations are increasingly having to act quickly. This is very much a candidate-driven market.
We are also seeing a changing mindset towards boomerang employees, with organisations reaping the benefits of re-hiring former top talent. Boomerang employees are those who leave an organisation but return to work for an employer at a later date. They can provide organisations with a secure recruitment investment, not least because they have a familiarity with the corporate culture and the organisation knows what to expect of them. Whereas in the past companies may have actively excluded such executives from the recruitment process, skill shortages have changed this. In a 2015 Work Institute study of 1800 HR professionals in the US, 76% said they are more accepting of former employees. This in turn is spawning alumni groups on Facebook and LinkedIn with HR heads using them to keep in touch with former top employees.
As business confidence rises, so do salaries. Large firms have to be increasingly competitive in their approach to secure the best of the finance world. As a result salary negotiations are becoming increasingly more common.
Employees are aware of the skills shortage and know they are a valuable resource to potential employers; this means they have more confidence in negotiating and are not afraid to ask for more. This is ultimately driving up the average salaries within the sector. According to the latest Financial Director salary survey, the UK’s finance chiefs have seen their personal fortunes more than double since 2009, with average pay increasing by 38% in the past year.
Like most sectors, there is also a gender imbalance when it comes to salaries in financial services. This is reflected in our latest Norrie Johnston Recruitment download, The Secrets of my Success. The research from this report suggests that women in finance, as well as other industries, have much lower salary expectations than their male counterparts. A female Finance or Chief Finance Officer expects over £26,000 less than a man in the same role which is a 25.8% differential. Mindful of this and under pressure to boost female representation on boards and tackle the ‘glass ceiling’, many companies that come to us are insisting on seeing an equal mix of male and female candidates for senior roles.
Given all of the above, it’s not surprising that organisations are trying to be much savvier in their approach to retaining employees. We’re seeing packages that include unlimited vacations, sports and social activities, discounts on leisure activities plus creative secondments and sabbaticals.
It’s not just the economy that has seen changes, social networks are also impacting on recruitment. For instance, with a third of the world’s executive talent now registered on LinkedIn, many companies are no longer bothering to develop their own talent pools. Our research among 100 HR heads into how organisations are using LinkedIn for executive recruitment, found that 68% saw the social channel as particularly good for reaching finance functions and that just 11% are creating their own in-house databases these days.
This swift recap outlines some of the key recruitment trends within the financial services sector. To find out more or to discuss your own executive recruitment needs call Rex Cridland, Director at NJR, on +447714 252116, email [email protected] or visit www.norriejohnstonrecruitment.com