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Operations Market Commentary, Q2 2015

• Article by BRUIN Financial

Operations Market Commentary, Q2 2015

MARKET OVERVIEW

Q2 of 2015 followed on from a very positive end to Q1. With the majority of bonuses having paid and most hiring freezes now complete, the market has been steadily gaining in strength. As with Q1, there is a distinct focus on direct hiring, particularly within the larger tier 1 institutions, but with volumes increasing and more candidates on the market, conversely creating more jobs through the need to back-fill, agencies have started to witness a marked increase in the number of roles being sent through.

In stark comparison to Q1, a number of the larger Investment Banks have been releasing a greater number of roles to agency. This is for a number of reasons, with end-of-year freezes ending and increased regulatory pressure being the main contributors. As in the previous quarter, buy-side hiring has remained strong, particularly in the small-medium houses, with a number of growth hires being released throughout the quarter.

Permanent hiring in particular has picked up heavily, seeing a large increase in the number of growth and replacement hires on both the buy- and sell-side. There has also been a wider variety of positions on offer, from back to front office, as banks look to take advantage of the favourable candidate market or fill vacated positions quickly by utilising agency assistance. The Temporary market has also remained strong from the end of Q1, with many top tier institutions making the decision to fill roles with contract staff as opposed to permanent head-count.
In summary, Q2 has been an incredibly positive environment in the hiring market, with a wealth of skilled candidates on offer in response to the increase in number and variety of positions available to them. The end of the quarter saw the market slow down slightly, with most resignations and subsequent back-fills being completed, but overall it has remained buoyant and sets the stage for a strong Q3.

PREDICTIONS

As alluded to in the Q1 Commentary, the cessation of hiring freezes saw an increased influx of positions throughout Q2. Whilst we fore-see a slight decline in the number of positions available in Q3, the forecast still looks strong, particularly on the Investment Banking side. As banks prepare for the next round of regulations, in particular the new Clearing regulations and MIFID 2, Banks are continuing to hire for key positions through-out the year.

The market continues to shift towards a more candidate-centric perspective for the more in demand positions. We also expect to see more high level positions becoming available on the market, as Banks and Asset Managers look to add more oversight of these key roles.

The Commodities market in particular has seen some increased movement in recent months, with one Investment Bank in particular investing heavily in this space, to take advantage of the vacuum left by the exit of several notable key players in the industry over the past few years. We expect this trend to continue throughout Q3 and the rest of the year.
In conclusion, this quarter has been a particularly positive one for Financial Services. Strong candidate capability/availability and the higher volume of roles has brought about a period of significant growth. The main barrier going into Q3 will be the hiring process, which continues to cause issues through slow or inefficient processes.

ROLE PROFILES

The market has seen a much more diversified offering across both role and candidate profiles, with roles from Front Office TA positions to straight-line Back Office processing positions on offer, although the latter has been in greater evidence in the Permanent market.

The largest area of focus in terms of roles remains within the regulatory space, with many Banks and Asset Managers responding to increased regulatory pressure by ramping up their Transaction Reporting capability. For this reason, candidates with strong knowledge of EMIR, Dodd Frank, MIFID or CASS regulations, along with good derivative knowledge, have been able to command much higher salaries. These candidates will often receive multiple offers, along with having a higher chance of counter-offer.
Collateral has been another area of strength in the market, particularly for people with a high proficiency in either OTC or Repo Collateral margining. In contrast to previous periods, this growth has been seen as much on the buy-side and the sell-side, offering candidates in this area the possibly of transition from Banking to Investment Management, thereby entailing a stronger and more diverse offering in the market.

In the Permanent market, there has been a number of Transfer Agency related positions at a number of tier 1 buy-side institutions, as well as a high proportion of Data Management positions. There has also been an increase in the number of high-level positions at C-Level at both large and smaller institutions across Financial Services. The Temporary market has seen a larger proportion of Middle Office positions available in the market, with back-office processing roles falling in availability as the quarter progressed. The initial influx of Corporate Actions positions at the beginning of the quarter has also seen a decline due to the end of Dividends season.
Whilst the summer months have in past always brought about a slow-down in availability of positions, there is some evidence that the market could continue to remain healthy throughout this period, well into Q3.