The third quarter of 2021 has been extremely positive from a hiring perspective in Credit, Risk and Quantitative Analytics. It is no longer accurate to say that we are back to “pre-pandemic” levels of hiring, as what we are seeing in the market in terms of hiring demand definitively exceeds that which existed at the start of 2020. We have taken on a twenty percent higher number of mandates in the last quarter than we did in the last full quarter before the pandemic started, which is a testament to the buoyancy of the current market.
The biggest challenge of the past quarter has been accessing pipelines of passive talent in our markets, which are significantly candidate-driven. With the lifting of the Coronavirus restrictions in the UK in mid-July, summer holidays, and being the majority of the way through the bonus year, it’s unsurprising that non-active candidates may have had reason to stay dormant in the last quarter. However, now that the UK has returned to a semblance of normality (present supply chain issues notwithstanding), we are starting to see more candidates starting to look at the job market again.
There have been two clear messages from the past quarter. The first being that the market conditions for candidates are stronger now than they have been for years, and it wouldn’t be an exaggeration to say that, if you are not keeping an eye open for opportunities, you are overwhelmingly likely to be missing out on something potentially very good. The second being that everyone is hiring, so it’s extremely likely that if you are interviewing a candidate, they are interviewing elsewhere in parallel (and in many cases with your competitors!). It’s important that firms are conscious of reinforcing their values, culture and unique selling points at each stage of the interview process, even in roles where there’s a high technical barrier to entry that needs to be cleared.
We have had a very successful track record of delivery in the third quarter, placing twenty six roles in total across our areas of vertical coverage. These have included four “head of” roles split equally across Investment and Operational Risk, a Director in Infrastructure Credit, a lead Risk Quant into an Asset Management firm, and several analysts and managers in a very competitive market for candidates at these levels. Coming into Q4, we have several director level roles active in both Investment Banking and Asset Management, and are hoping to finish 2021 strongly.
Multi-asset & Solutions and Fixed Income were particularly busy in Q3, particularly at the more senior end of the market, with roles ranging from manager to “head of team” level. We have also seen an increase in demands for candidates with private markets experience, however firms are finding that they need to show flexibility on a candidate’s asset class experience given the relative scarcity of candidates with direct experience managing risk in private markets. Furthermore, a number of asset management firms have sought to hire data focused risk professionals with strong database manipulation and data visualisation skills, to help in the effort to ensure Risk management has excellent quality data to make decisions with.
The market for professionals with Operational Risk and Controls Assurance experience remained buoyant in high demand, as the 3 lines of defence model continues to roll out across the buy side. Operational risk divisions in private markets firms have been actively hiring too, but the product knowledge isn’t currently there with the majority of candidates, and those in more technical, fund focused roles who have the product knowledge are in extremely high demand.
From a sell-side perspective, the market for credit risk modellers at all levels of seniority is exceptionally busy. Investment, corporate and retail banks have all been hiring actively in this space in Q3, as have consultancies and fintech firms. We also continue to see strong demand for candidates who have experience in, IFRS9, stress testing and climate risk-related roles. We have also seen a number of our clients expanding their CMBS/CRE BAU analysis coverage. Buyside credit risk hiring slowed down significantly in Q3 in contrast to the rest of the market.
From an investment banking perspective, demand for market risk analytics professionals has ramped up significantly towards the end of the third quarter, with a high volume of hiring on both a contract and permanent basis. We are seeing more roles come to market which require a dual skillset across traditional market risk methodology (knowledge of financial mathematics e.g. stochastic calculus, derivatives pricing, monte-carlo simulation etc) and software development skills, and this is proving challenging. BAU desk market risk management hiring has mainly been concentrated in commodities trading houses, clearing houses and exchanges.
The bulk of the hiring seen in the Information Security sector in Q3 has been at the more junior end, with an abundance of roles in data privacy, IT risk and cyber security. These roles have mainly been newly created hires, as asset management firms seek to build out their existing divisions.
Returning To The Office – Impact on Risk Hiring
The third quarter has seen a fervent discussion, both internally at organisations and in the media, around staff across all industries returning to their offices. Now that the government’s previous “work from home if you can” instruction is no longer in place, the City is exponentially busier than is has been for the past 18 months, although empirical observation would suggest not as busy as pre-pandemic. We are however starting to see flexible and remote working policies at firms start to have an impact on the hiring market in Risk Management.
Below are some trends observed thus far:
A minority of organisations have been quite strident in enforcing a blanket policy of employees returning to the office five days a week. This has led to some chagrin amongst employees, particularly those at the senior end of the scale and in back office roles, who have been most able to take advantage of the benefits that home working has seen (reduced commute times, more time to spend with family etc). Ultimately, it is felt that these organisations are at a disadvantage in the current hiring market with this stance, particularly when looking to make senior hires.
At the other end of the scale, some organisations are quite happy to keep their employees working remotely full time, and there have been some high profile cases of organisations significantly downsizing their physical offices to reflect that. However, whilst the remote working enforced by the pandemic has undoubtedly been largely successful, and not seen a drop-off in productivity overall, it has proved difficult for many starting in a new firm remotely. This is particularly pertinent for junior candidates who are not as familiar with the industry and don’t necessarily have the experience to operate effectively in a remote setting.
We would encourage organisations to, where possible, look at this issue on an individual case-by case basis with regards to existing employees and prospective candidates to join. Adopting a “one size fits all” approach to working in the office is likely to significantly restrict options for hiring, and could see a talent exodus. Similarly, we would encourage prospective candidates to think about their own personal development needs and the needs of the wider organisation in the same regard. If you’d like to discuss the current landscape of remote and flexible working, please reach out to one of our consultants.