Insights

Finance & Accountancy

FINANCE MARKET COMMENTARY Q4, 2015

• Article by BRUIN Financial

FINANCE MARKET COMMENTARY Q4, 2015

MARKET OVERVIEW

Q4 was a relatively quiet period and the market remained highly candidate driven, with the demand for candidates outweighing supply. As a result of this, the recruitment process has become increasingly competitive, with more counter-offers and bidding for sought after candidates.

Therefore, companies need to act as quickly as possible in order to speed up the recruitment process. However, given that Q4 demonstrated similar trends to Q3, there have been limited budgets and the numbers of candidates looking to move has remained stagnant.

Surprisingly, many firms were looking to hire before the New Year and with many candidates choosing to hold off their search until bonuses are paid, this contributed towards the supply and demand problem. That said, bonuses generally aren’t predicted to be strong and some firms are choosing to pay it sporadically, whereas others are more willing to offer higher salaries, as an attempt to ensure employees are not tempted by counter offers.

Hiring freezes were predicted for Q4 amongst some of the larger companies but in reality there has only been a handful, while others continue to source talent.

ROLE PROFILES

There has been a steady stream of Product Control roles, mostly requiring candidates from the Graduate to Associate level, similar to Q3. But just like Q3 the talent has been far and few between, making the Product Control area amongst the most competitive within our Investment Banking, Asset Management and Hedge Fund clients. The biggest focus now being on candidates who can add value to the P&L process rather than production as most of this side has been outsourced.

There has been an increasing focus on roles within Regulatory and Treasury space; seeking candidates, for example, with knowledge of ICAAP, Liquidity or RRP (Recovery and Resolution Planning). As these areas are increasing in size within the Banking/Asset Management industry due to imminent new regulations, the candidate pool is smaller than other areas of finance. Also, something which is notable to add is that the few candidates who do have the Regulation knowledge and which are willing to move tend not to want to stay within this area. And this results in an almost no existent pool of candidates to choose from for most of our clients.

In Q4 we have also seen a higher emphasis on Cost positions for larger companies, as many look to near/off-shore production roles, resulting in finance teams in London becoming more streamlined. The level of these roles (FP&A or Finance Business Partnering) has largely been around Associate to AVP. Unlike Product Control and Regulation positions, there are a higher number of candidates in the market with the skill set to preform these roles. Also, the candidates that are in the market are willing to do these positions, which is unlike the candidates who want out of Product Control for example.

PREDICTIONS

Going into Q1 of 2016 we predict that the market will take its time to pick up due to hiring freezes and the number of candidates looking to hold out for bonuses. A busy year end will also be a factor for many candidates struggling to find time to commit to their search. But towards the back end of Q1 we should start to see things slowly changing. Budgets should be established and bonuses will be announced which will open the door for candidates to start actively looking in the market.

We believe that competition to attract talented individuals will remain throughout the year but the key determining factor for firms to be successful will be the speed of the hiring process and the package they are willing to offer.

TEMP MARKET OVERVIEW

We saw varying levels of demand throughout Q4, across both the buy and sell side. We had expected to see levels of hiring diminish as we moved through the 3 month period, yet found that our clients were still keen to recruit for roles even as we approached the Holiday period.

On the contract side, there are both a high number of candidates as well as roles. However, we are seeing more and more that candidates are required to have a very particular skill set in order to be successful in their application. For example, junior candidates (1-3 years post qualification experience) are being asked to have greater knowledge of various accounting standards. This is so that hiring managers are able to differentiate between the high numbers of applicants.

We are also finding that candidates in the contract market are 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.

TEMP ROLE PROFILES

The roles that we have seen in the contract market have been fairly similar in nature to those in the permanent market. There has again been a steady of stream of Product Control roles. However, the product control roles in the contract market tend to sit in the AVP/Junior VP bracket, as opposed to the more junior end. Thus, roles in Product Control have required strong and detailed product knowledge in the relevant class. Depth of product knowledge is often where candidates are coming unstuck in the majority of cases.

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 has been sustained, with roles at varying levels across both Investment Banking and Asset Management. We have seen roles at the junior end within Asset Management, whilst the more senior roles have been within Investment Banking.

TEMP MARKET PREDICTIONS

We are expecting the market to be slow as we move through Q1, with the vast majority of clients choosing to complete the year end process before commencing with any new hires.
Due to the fact that a lot permanent candidates will wait until they receive their bonuses before they decide to move (which won’t be until the end of the Quarter), there will not be the need to bring contractors in to backfill permanent roles until the tail end of Q1 or start of Q2. We predict that any hiring done during Q1 will mainly be to replace departing contractors.