CREDIT & RISK MANAGEMENT MARKET COMMENTARY, Q3 2022

Market Overview 

INTRODUCTION

As we enter the fourth quarter of 2022, we are very much still in an active hiring market in the Credit, Risk and Quantitative Finance sectors. Whilst things slowed down to some extent in August, which we thought could be a sign of things to come in Q4, by contrast, September has seen the pace pick up significantly as firms look to complete their hiring for 2022 before the end of the year.

As we see it, currently there are two major challenges in the hiring market. The first is the current high inflation rate and cost of living crisis, which is seeing several firms either raise wages or make one-off payments to employees to alleviate issues with rising prices, particularly at the more junior levels. The second is the consistent level of high demand this year pushing salary expectations through the roof with candidates.

As always at this time of year, there is a decision to be made by firms on bonus buyouts when candidates are being offered. Overall, firms seem less willing to do this than they have been in previous years, so are inflating salaries in lieu. One potential reason for this lack of buyout appetite is that bonuses are anticipated to be down overall due to market conditions, so buying out based on historical bonuses may not be cost-effective.

We are in the process of data gathering for salary and market conditions in the Credit, Risk and Quant spaces. We aim to produce a document from this which will inform on basic salary levels, bonus levels, flexible working and COVID-19 adjustments, and employee wellbeing. We will be publishing this in Q1 2023 so if you’d like to receive a copy please let one of our consultants know.

Buy Side Risk 

On the buy side, there has been a significant volume of hiring of investment risk professionals into the alternatives space in Q3, and candidates who have private debt, real estate and credit experience have been in high demand. We are also seeing an increased demand for investment risk analytics candidates across the industry, as firms look to enhance their ability to bring new data into existing processes and streamline their sourcing of such data.

Climate risk is also becoming an area of growth hiring, with a number of the larger asset management firms looking to source individuals to measure the potential impact of climate events on investment portfolios. Some firms have added responsibilities to existing investment risk teams in addition to BAU, whereas others have split teams out to focus on this solely.

From an operational risk perspective, Q3 saw the completion of a number of the first ICARA processes, and as such high demand for people with this skill set is expected to continue as these mature. Technology risk experience has also continued to be in demand across the first and second lines of asset management.

 

Sell Side Risk 

Q3 has seen significant demand for hedge fund credit risk professionals at all levels, as banks continue to grow these functions. Also, there has been demand at the senior end of the credit market for candidates with experience in corporates, specifically in energy utilities.

Operational resilience hiring has continued to be an area of high demand across banking, and we anticipate that this demand will continue into Q4.

 

Quants

In the third quarter, the majority of growth hiring was seen on the buy side, with a significant emphasis on junior/mid-level hiring for candidates with fixed-income research experience. Firms have especially been looking for candidates at this level who can perform both investment-related and coding infrastructure tasks, with both skill sets being tested at interviews.

From a sell-side perspective, front-office hiring has slowed in Q3 in line with the typical cyclicality of global markets, and firms are looking to put hiring plans together for Q1 2023. From an analytics and governance perspective, ESG and climate change remain key areas of hiring for investment banks and consultancies. With traditional talent pools in these areas being relatively sparse due to these being relatively new areas of focus, firms have broadened their horizons to look at candidates from the domains of scientific research, catastrophe modelling and stress testing.

 

Diversity

At Bruin, we believe in transforming the horizons and prospects of young Black people in the UK through paid work experience, as well as world-class training and development. As such, we are proudly taking part in the 10,000 Black Interns programme for the third consecutive year to offer a 10-week paid internship over the Summer across our business to provide Black students and graduates an open door into the financial services industry.

The third quarter has also seen Bruin partner with CAMPAIGN, an LGBTQ+ networking group in Recruitment, Search, and Selection which celebrates love, equality, and inclusion. CAMPAIGN is here to bring people together through sharing ideas, emotional support, and change-driven inclusivity strategies to improve the representation and inclusion of LGBTQ+ people within the industry; one that promotes togetherness, friendships, and allies, no matter where we work – even with a direct competitor.

For more information about our initiatives to promote a more diverse and inclusive workplace across Financial Services, please reach out to one of our consultants.