city horizons
TRANSCRIPT
InsIght Into the fInancIal servIces recruItment market from BruIn fInancIal
City Horizons
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ForewordExperts & Methodologysurvey resultssurvey resultsindustry reputationPeople focusPay and bonusPay and bonus Attitudes to employmentthreats in the industry
We are tentatively emerging from one of the darkest periods the global financial services sector has ever seen.
Thousands of job losses, the collapse of some of the biggest names in banking and Government bailouts have dominated the headlines.
It wouldn’t be surprising if those who choose to make their living in the financial services sector were clinging to their current position with both hands – happy with any rung on the career ladder.
In some areas candidates clearly feel there are signs of recovery but, the jury is definitely still out on whether those are genuine green shoots or not. There are too many issues unresolved to suggest that the sector is truly in recovery.
Against that backdrop, BRUIN Financial has conducted some significant research; surveying nearly 2,000 people from both sides of the interview table to get a dual picture of the opinions, emotions and aspirations of employees and employers.
The results – and the contrasts – are fascinating, and we have compiled a panel of five experts to help us extrapolate these findings with their own insight and opinion.
City Horizons drills down into a number of issues which will be on the menu for anyone looking for a job, or recruiting, in the next few months.
How important is job security? Who feels adequately paid? What do the once glorious reputations of our biggest financial institutions mean to potential employees post recession?
We have also examined the hopes and fears of employer and employee in terms of pay and bonus expectation, the threat of jobs going overseas and whether the media has to shoulder some responsibility for sensationalising certain issues.
By examining all of these issues from two perspectives we have secured a valuable armoury of insight which should help prospective employers gain a deeper understanding of what will motivate the candidates they are trying to recruit.
Similarly, employees dusting off their CVs and updating their LinkedIn profiles can prepare themselves for interview with a greater understanding of what is going through the collective mind of HR directors as the recovery kicks in.
It is too early to apply any kind of long-term prediction on the recruitment sector based on this report but there is definitely a lot to be positive about.
We hope you enjoy finding out why in the following pages.
Robert Thesiger, Chief Executive Officer
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Conducting two surveys – one focusing on candidates, the other on HR Directors – has given us an insight into the current mindset of those sat on either side of the interviewing table.
How aligned are employers to the thoughts and opinions of the next generation of candidates looking to gain a foothold in the financial services sector? Are employee expectations regarding pay and bonuses unrealistic in this uncertain climate?
There are some fascinating points raised by the research about key issues such as the reputation
of the industry, the threats it faces and how renumeration and taxation will be structured in the glare of Government and public scrutiny.
We’ve added another layer of interest to analysing the results by asking a panel of experienced industry professionals to interpret different elements and give us their views on what these patterns or anomalies can tell us.
Over the next few pages you can see graphic representations of the findings and the commentary which helps bring them to life.
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Pay and bonusPay and bonus
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oUr City Horizon EXPErts AnD MEtHoDoLoGyMeet the industry experts who agreed to share their thoughts on our survey and the methodology we used to collect the data they examined. Commentary from everyone below is included throughout the report accompanying to relevant graphs.
David O’Brien – recruitment & smaller companies analyst, Shore Capital
David joined Shore Capital in 2010 after previously working for Altium Capital, CreditLyonais, Credit Suisseand Beeson Gregory. He has been researching the recruitment sector for 8 years.
James Wellesley Wesley – partner, Wyvern Partners
James specialises in Human Capital Services and has advised on many landmark transactions in the recruitment sector over the past 20 years. He owns a number of specialist recruitment compa-nies.
David Cubitt – head of Employment Law, Osborne Clarke
David has over 20 years’ experience advising clients on employment law. He is particularly interested in advising financial institutions in the City on matters including discrimination and bonus claims.
Katie Folwell-Davies – director, corporate finance, Deloitte & Touche LLP
Katie is a partner within the finan-cial services team focused on banking transactions. She leads the firm’s EMEA response to bank deleveraging and specialises in cross border M&A.
Robert Thesiger – CEO, BRUIN Financial
BRUIN Financial Robert Thesiger has over 18 years of financial services recruitment experience. Prior to founding BRUIN, he was the Chief Executive of a leading financial services recruitment business which he ran for nine years.
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KEy toPiCs For DisCUssion An at a glance view of the topics and trends our experts will discuss over the next few pages. The colours relate to the key above.
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ForewordExperts & Methodologysurvey resultssurvey resultsindustry reputationPeople focusPay and bonusPay and bonusAttitudes to employmentthreats in the industry
A hot topic in the wake of the financial crisis was how the new landscape would impact on remuneration. We asked: How do you think compensation culture in the City will change over the next two years?
Pay and bonus
Smaller bonuses and higher basic pay
Greater use of deferred bonus payments and shred bonus schemes
27%
33%30%
There’s no denying that the financial services sector has been in the spotlight for all the wrong reasons in recent years. High profile collapses, scandals, bailouts – how has this affected perceptions and support from Government?
How are employees actually feeling in the current climate? Is confidence in short supply? Do employees feel secure?
Industry reputation People focus
How secure are you in your current role?
Do you feel more secure in your
current role than you did last year?
How confident are you of securing a
similar or better role in the next six months?
23%
9%
33%
34%
44%
57%
Increased Stayed the same Decreased
Do you think the level of government support for the financial services industry has increased or decreased over the last year?
Insecure
Secure
43%26% Less
secure
More secure31%
30%
Notconfident
Confident41%33%
25%
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Two more themes which emerged from our study were ‘attitudes to employment’ and ‘threats to the industry’ both key factors not necessarily under the control of financial services companies themselves, but are they issues which will affect the employment market?
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One of the most damning indictments of an era in which big name banks collapsed was that fewer employees now care about the reputation of an organisation when looking for a job. We asked: Which of the following is most important to you at the moment in regards to a job?
Most industries are facing threats but financial services feels particularly beleaguered. Greater taxation is a major fear. We asked employers: ‘Do you think taxation on financial services companies will increase or decrease in the next 5 years?
Threats to the industry
Attitudes to employment
19%6%
75%
Taxation on financial services companies will increase in the
next five years
Taxation on financial services companies will stay the same in the next five years
Taxation on financial services companies
will decrease in the next five years
Company reputation Career progression opportunities
Job security
4% 10% 27% 14% 20% 62%4% 10% 27% 14% 20% 62%4% 10% 27% 14% 20% 62%
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53%
Yes Yes
58%
4% 10%
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ForewordExperts & Methodologysurvey resultssurvey resultsindustry reputationPeople focusPay and bonusPay and bonusAttitudes to employmentthreats in the industry
Company reputation
Have politicians and media sensationlised issues of pay and bonus?
What’s important to you in regards to your job?
An inDUstry UnDEr tHrEAt or MEDiA HyPE?
The media attention on financial services has been pretty relentless and new issues continued to come to light as this report was being published. However, there is still a sense that this has been sensationalised to a degree. Has it left employer reputations of little value to candidates?
David CubittThe job for life at one of the big names is gone. Candidates are now focused on securing the best package and it is becoming far less relevant to them who funds it. Some of the biggest reputations in the business have proved that no organisation is immune to recession.
James Wellesley WesleyThe last few years have shown that reputation can be trashed in an instant. It matters a lot less. Employees have grasped this and employers aren’t far behind. It’s a very different landscape.
David O’BrienI’m not surprised that both sets of respondents feel that the reputation of the City has been sensationalised by media. The sector has been used as a scapegoat for a lot of ills and there has been plenty of political posturing. These people aren’t receiving the big bonuses that are under fire yet they feel tarred by the same brush.
Several years of negative media attention for the sector. Has it affected attitudes?
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41% 31% 28%
63% 21%
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What is important to you in regards to your job?
Has your work/life balance improved or deteriorated in the last six months?
Job security
Competitive compensation
Does anyone really go into financial services expecting work and life to have a healthy balance? Is this changing with a new breed of recruits with different priorities?
BALAnCED LiFE, MonEy or sECUrity?
Robert ThesigerI expect to see a far more peripatetic bunch of recruits coming through in the next few years. It will be interesting to see if the City can adapt to a workforce that conforms less to the model it has now and demands a better work/life balance. The change will certainly not be as radical if the job market doesn’t improve though.
James Wellesley WesleyI think candidates are hard-wired for optimism. If you’ve decided you want a new job, you have to go for it. The results show that even if people don’t have huge confidence in the wider market, they do have confidence in their own skillsets.
Robert ThesigerThe expectations on pay and bonus we see in the survey are a fatal mismatch with what will be reality for many people in their 20s and 30s. Compensation increases will still be available but not for anyone. It’s going to be a lot more competitive.
David CubittThere is a clear disparity between how important job security is to candidates and how important employers think it is. That should dispel a few assumptions. Candidates obviously don’t think that kind of security still exists.
Job security is nowhere near as important as employers think it is. Outdated concept?
Stayed the same Improved Deteriorated
16%
20% 62%
21% 11%
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ForewordExperts & Methodologysurvey resultssurvey resultsindustry reputationPeople focusPay and bonusPay and bonusAttitudes to employmentthreats in the industry
We are still in recession aren’t we? So why are expectations regarding salary so high? Less than a fifth of employees reported a decrease yet there are expectations of greater government scrutiny.
Cross My PALM WitH CoMPEnsAtion
Katie Folwell-DaviesWhat has become clear is that money was one of the key things keeping people at banks, and banks now need to replace the promise of money with something just as valuable: career progression. Otherwise the talent in the financial services sector will move away from banking.
David O’BrienI’m very surprised that so many employees are reporting that pay and bonus has increased in the last six months. I’m not sure if there isn’t a degree of bravado because this isn’t being born out by employers that I have spoken to.
Robert ThesigerThe attitudes prevalent here indicate a lot of expectation regarding career progression. Post recession, I’m not sure people will be able to plan their careers in the same way, particularly those still in the under £30k salary bracket.
Has your compensation level increased, decreased or stayed the same?
Do you expect them to increase, decrease or stay the same?
50%
19%
Increased
67%
23%
54%
31%
Stayed the same
25%
57%
27%19%
Decreased
8%
20%
Cash in their pockets or career progression? Employees want both.
Greater scrutiny by the media and politicians regarding pay and bonus
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James Wellesley WesleyThere’s still optimism that higher pay is there for the best candidates but the message from employers is that you are going to have to work harder for it and stick around longer to collect bonuses. Both sides seem to accept that this is the future of remuneration.
Robert ThesigerThe way pay and bonus is distributed will change because the industry is under pressure for it to do so. We can see that both candidates and employers expect this to happen but exactly how is unclear. Joining bonuses are risky. More will probably be fed into base salaries and there will be greater flexibility for deferred payments.
David CubittGood people will always get jobs. It is how employers stop people moving around after each bonus, constantly in search of the best package, that will be interesting. Deferred bonus payments will have a part to play in this but I think we will also see a counter-reaction of first year guaranteed bonuses to tempt people.”
How do you think the compensation culture in the city will change over the next two years?
Higher basic salaries? 27% of employers think so.
1
2
3
4
5
6
7
Smaller bonuses and lower basic salaries
Smaller bonuses and higher basic salaries
Higher bonuses and higher basic salaries
Higher bonuses and lower basic salaries
Greater use of deferred bonus payments and share-based bonus schemes
No change
27%
25%
25%
2%
10%
1%
2%
33%
12%
2%
1%
30%
19%
9%
2
3
4
5
6
7
1
A third of employers expected greater use of deferred bonus, slightly higher than more optimistic employers.
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ForewordExperts & Methodologysurvey resultssurvey resultsindustry reputationPeople focusPay and bonus Pay and bonus Attitudes to employmentthreats in the industry
There is definite optimism evident in the results from employees regarding the availability of jobs and how this will increase over the next six months. It isn’t an optimism matched by employers though.
oPPortUnitiEs FroM tHE AsHEs?
David O’BrienWhat you have to put into context is that six months before this research, the sector was at a nadir. People have been working in understaffed environments. Many think it simply can’t be sustained so their optimism is also fuelled by hope that more roles will be filled across the sector.
Robert ThesigerA lot of people seem to be looking for jobs with a false belief that the grass is greener on the other side. It isn’t but there is a definite belief from individuals that a move will equal a payrise. Much of this stems from a lack of career progression on offer with their current employer.
Katie Folwell-DaviesThere are currently huge opportunities for the best candidates. In a time of challenge, such as we are currently enduring, organisations begin to review the talent they currently hold and this can lead to the best candidates being recognised and securing better positions.
How do you think the number of opportunities in your chosen field has changed over the last six months?
How do you think the number of opportunities will change over the next six months?
29% 31%
Stayed the same
Increased
37%
28%
43%
32%
Decreased
53%
39%
Stay the same
Increase
26%
40%
Decrease
21%
21%
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Any conversation about threats to the financial industry inevitably leads to discussion over whether jobs may still move overseas and what factors may drive this to happen at different levels throughout the sector.
intErnAtionAL BriGHt yoUnG tHinGs?
David O’BrienJobs moving overseas are still a clear worry. It isn’t surprising when there is talk of salary caps and reduced tax breaks that people are still worried that this shift might begin to apply to some of the higher paid departments as well. I think 54 per cent is over-exaggerating the issue a little though.
David CubittSome of the consolidation we have seen has been inevitable for survival but candidates are definitely swimming in a smaller pool of employers than 10 or 15 years ago, and the fears about certain jobs going overseas are still justified. Although some banks are now bringing certain operations back to the UK.
James Wellesley WesleyI have been of the view that the City of London has had its financial peak as an employment location but it will always be important. Some jobs will still go overseas at a certain level but we won’t see wholesale relocation. Companies like UK regulation.
Are you concerned that more financial services jobs will move overseas over the coming years?
Yes
54% 49%
Stay the same
16% 14%
No
16% 20%
Opposite
4% 2%
Unsure
10% 15%
BRUIN Financial Limited1st Floor, 5 Old BaileyLondon EC4M 7BA
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