Insights

Finance & Accountancy

FINANCE MARKET COMMENTARY, Q1 2016

• Article by BRUIN Financial

FINANCE MARKET COMMENTARY, Q1 2016

Market Overview

The first Quarter of 2016 has been a particularly difficult one for the Accounting and Finance world, especially within the Investment Banking environment. Many of the larger tier 1 institutions are continuing cost cutting measures, with high scale redundancies or the closing/scaling back of business areas which has led to a significant decline in positions for many institutions. The UK market continues to shift to an SME onshore presence focus, with many vanilla or process heavy roles (Product Control, Fund Accounting) being moved to near or off-shore locations. Asset Management has been more active in comparison, however with the current market climate, the volumes are still lower than was expected at the beginning of the quarter.

Largely, the volume in roles continues to shift towards those of a more regulatory focus, or servicing more exotic/structured areas of the firm. With many companies preparing for the impact of MIFID2/MIFIR, Basel III, UMR and various other regulations, candidates with these skill sets have been in high demand throughout the quarter.

There have been a number of candidates with Investment Banking backgrounds looking to move to the buy side. However, many clients still require past buy side experience to move so many good candidates have struggled in the market.

On the temporary side, we saw varying levels of demand throughout Q1, across both the buy and sell side. We had expected to see levels of hiring increase as we moved through the 3 month period at a higher rate, but with the Easter break falling at the end of the quarter, we didn’t see the increase in hiring that we had expected.

There is currently a surplus of contractors looking to move into new positions, most notably in Investment Banking. Due to the number of strong junior candidates in the market (1-3 years PQE), a lot of clients are asking for a broader set of skills as a means of differentiating between candidates.
There has been a continued emphasis on candidates in the contract market being asked to demonstrate when they may have worked on projects in the past. Many firms are now employing contractors who have the ability to work in a BAU line function whilst also being able to work on ad hoc projects taking place in the firm, as and when they are required.

Role Profiles

Q1 has maintained the same trend that we have seen in the last few quarters with firms demanding qualified accountants at the senior AVP level where there is a shortage of talent. We are increasingly seeing more hiring coming from Asset Managers as the Investment Banking market continues to shrink in the City. There has been a demand for candidates with Financial Planning and Analysis backgrounds to focus on firms strategy and analysis as they look to refocus and/or spread their coverage with current revenue strategies, this coupled with detailed analysis of their cost base as margins get tighter.

There continues to be a strong demand for candidates with regulatory knowledge, especially around ICAAP on the buy and sell side. As previously noted, there has been a marked decrease in demand for Product Controllers as many of the functions have been – or are in the process of being offshored. There have also been a number of Internal Audit positions released across the larger tier 1 institutions, as well as several Asset Managers/Hedge Funds, in response to increased pressure from regulators to ensure that any risks inherent in the various processes have sufficient controls in place.

The roles in the contract market have been very much at the junior end. As always, candidates with 1-3 post qualification experience are highly sought after. Seasoned contractors who may have more experience are often losing out to these junior candidates who may command a lower rate.

As always, there is a demand for candidates with strong regulatory knowledge, particularly for roles within Statutory Accounting. Again, this is across both the buy and sell side. The issue faced when recruiting for roles within this area is that a lot of the more junior candidates want to move into what they deem to be more analytical roles, such as Business Partnering and Financial Planning. The demand for candidates in the Business Partnering / FP&A space hasn’t been as high as in previous quarters and the roles that we have seen have been very junior in nature.

Predictions

We are expecting the contract market to pick up considerably when we move into Q2. This is due to the fact that the majority of firms will have had budgets and headcounts approved, so will be able to start to recruit for roles in real earnest. Also, a lot of permanent employees have had their bonuses paid, which is always the busiest period for job seekers each year. This increase in candidates on the market will therefore require firms to backfill these roles and will often turn to contractors as a means of plugging a gap in a short amount of time.

Additionally, factors such as ‘Brexit’, the unpredictability of the Chinese market and low oil prices are all contributing to high levels of uncertainty in the market, which are likely to continue to affect permanent recruitment for the rest of H1, moving into H2.