Toughing it out in the City
Tough times - but not as bad as the media makes out.
Trying to get senior City figures to comment on the jobs market in financial services isn’t easy at the moment. And are you surprised? It would take a brave HR Director to predict the employment trends over the coming months - and those we spoke to preferred to keep their views to themselves… or at least off the record.
But our labour market is actually far stronger in the UK than in the last official recession in 1992. Many financial organisations have already gone through the pain of restructuring to emerge as significantly leaner businesses, and the variable costs of bonuses are unlikely to be as severe a drag on earnings as staff come to terms with the new reality of life after the crunch.
“There are no signs that the end of the financial world - or opportunities within that world - is nigh”.
While the large investment banks have responded to the credit crunch by laying off significant numbers of staff, there are no signs that the end of the financial world - or opportunities within that world - is nigh.
Even Sir Fred Goodwin, CEO at RBS, is looking for the positive spin saying: ‘There’s clearly more bad news than good news, there’s almost exclusively bad news, but I don’t think we’re looking at the end of the world’.
No-one expects an immediate upturn with Bank of America CEO Ken Lewis summing up much of the current sentiment saying: ‘We have a way to go. We see the end of (the fallout from sub-prime) peaking in the third quarter 2008, in terms of charge-offs and delinquencies. So the credit crunch is going to play out over several more quarters”.
So what’s the mood in the industry?
One insider told us: “If you’ve survived so far, your job is likely to stay. We need good people and are focusing on the revenue streams we know will continue to make us money and looking East rather than West for our best business. Better balancing our asset and liability exposures is crucial but we’re actually facing far less pain than colleagues in the US. We’re expecting to be paying bonuses at the end of this year - but probably not at 2007 levels.”
“Good candidates will find the right role - they may just be confronted by fewer options”.
Another senior HR figure commented: “We’re still taking on new staff, but not across the board. We have areas such as compliance that are actually growing but some areas of wholesale banking and their support functions are taking a hit. We’re also taking on more temporary and contract staff than permanent employees.
“It’s interesting that we, as a more traditional, large operation, are being approached far more by people with a boutique firm/hedge fund background. There really are no guarantees of security here, but perhaps we offer a little more safety and more formal career development than smaller firms.”
Commenting for Badenoch & Clark, Alison Burgin said: “Clients in general are adopting a ‘cautious’ approach to recruitment this year. But, contrary to the popular press, there’s no panic in the City and actually signs of growth in other financial services markets such as Edinburgh.
“The market has largely shifted from candidate-led to employer-led. Increasingly, clients are not releasing roles until they have the relevant sign-offs in place. This is extending the length of the average recruitment process, but we feel that candidates would rather know that a job really is on offer than see it withdrawn before they start. That does no-one any favours.
“The bottom line is that while there will be fewer financial services opportunities this year, good candidates will find the right role - they may just be confronted by fewer options.”
“I largely concur with what Badenoch & Clark is saying,” a senior figure from a large investment bank concluded. “Over the past couple of years, almost any candidate could land a job, but now banks are more discerning. I’m now regularly faced with 20 or 30 good CVs per role, whereas a year ago I was lucky to get three or four of variable standards.
“Good candidates will land good roles, but they need to think more about why they’re moving. There are no golden hellos now, no huge hikes in salaries to be had, and bonuses and perks such as hospitality and travel will be down this year.
“But the City has always been cyclical, and if people are prepared to ride out the storm, be it in their current firm or by landing a new role that’s going to stretch and develop them more, then they’ll benefit as we begin to swing back up again.”
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