Market Overview
INTRODUCTION
The past 12 months has seen the global workforce forced to change it’s working practices drastically. These contingency plans are now the future of how asset managers will engage with their workforce as it has shown both productivity at work and a work-life balance can go hand-in-hand. There was a sense of apprehension about how 2021 would begin, with a lot of hiring being out on hold for the vast majority of 2020 and only ‘business-critical’ hires/projects being signed off. However, Bruin’s Project Change and Technology team have been inundated with new roles from the buy-side looking to scale up their change and transformation functions. The second half of 2020 saw that businesses were able to get people onboarded remotely, and this approach remains across the market and recruitment is no longer frozen.
The delay of changes to IR35 may have given some respite to contractors last year, but it has heavily impacted how the buy-side are engaging with temporary resources moving forward. Many contractors have been asked to either go permanent or switch to an inside IR35 contract or take a fixed term contract. We’ve seen the majority of our clients opt for fixed term contracts, giving people the financial benefits of permanent employment for a set number of months, replacing the traditional day rate method. Traditionally, FTCs weren’t seen as attractive, but clients have been forced to increase the salaries being offered to attract contractors.
Within the Projects & Change space specifically we have noted that strategic or transformation initiatives have been the main focus during the first quarter, with a high demand for change professionals with Target Operating Model design and business process mapping experience. With new digital working practices, the way asset managers deliver change is more important, so TOM design and implementation is at the forefront of any strategic change piece of work. Regulatory programmes still dominate the financial services market with LIBOR projects due to be delivered this year. We are also seeing high demand in Project Managers and Business Analysts with ESG experience, as asset manager adapt to their clients demands of more visibility around where their money is being invested.
2021 has also seen buy-side vendors increasing their product offering in data management and analytics. Many of the big players in the market are offering front to back solutions either developing new tools or acquiring smaller vendors into their own product suite. This is so that asset managers can have a trading platform that enables them to better use the data they have and make more accurate trading decisions.
Technology transformation has been ever-present, with the buy-side increasingly trying to engage with their clients and customers through more digital mediums. The building of new websites, client portals and digital marketing are big themes as traditional fund managers aim to keep up with the more technologically advanced in the market. The majority of our clients are moving from on-prem to cloud with a high demand for people who have managed or worked on migrations.
We’ve seen a number of senior leadership roles throughout Q1, with asset managers looking for candidates to manage different change and technology functions. Due to a number of big projects being put on the backburners last year, and candidates reluctance to move, many of these big hires are now given the greenlight, such as Heads of Change, Programme Directors, Heads of Development and Technical Leadership. Many clients are looking for technical leaders to help build bespoke, in-house platforms that will reduce asset managers reliance on vendor tools.
PREDICTIONS
Our prediction for the rest of the year is that the recruitment market across the buy-side will remain buoyant. The changes in IR35 mean that some of the contractors that are still weighing up their options will be forced to choose as the deadline approaches. There will be a large saturation in the market, with many contractors finishing at the end of March. With more strong candidates to choose from, clients will be more picky when it comes to selecting candidates and we have seen that this has slightly lengthened interview processes.
The same demand for regulatory change professionals will remain, as new asset managers continue to operate in a heavily regulated market. The same is said for technologists, with financial services companies increasing their offering to a new generation of investor who operate in the modern digital world. The impetuous on building in-house software as opposed to buying third party will only increase the need for software engineers across financial services.