Market Overview
The Finance, Audit & Tax teams here at Bruin could not have asked for much more of a positive start to 2021. Albeit starting the year off in a third national lockdown, the Financial Services industry has showed clear signs recovery when it comes to recruitment with the team having a record quarter.
The job flow at the start of the quarter was very high across the majority of our client base, in particular Asset Managers. We saw a number of our larger Asset Management clients, who had reduced levels of recruitment last year, hiring into teams that had been under strain as a result. It was particularly satisfying helping these clients out.
We continued to see large volumes across our Alternatives client base within Finance & Tax. This was across both large, established houses who continue expanding, as well as newer managers, a lot of whom are growing at a very fast pace. Infrastructure and Real Estate funds have been particularly busy, as have our Private Equity and Venture Capital client base which we continue to grow.
In the Contract Market we saw continued speculation in the lead up to IR35, with clients and candidates alike unsure whether there would be another extension due to COVID’s continued effect. However, this did not affect the job flow as we saw a very busy start to Q1 across both our Asset Management and Investment Banking clients in the contract space. As we moved through the quarter and it became clear that the IR35 legislation would go ahead, there was a marked increase in the number of Fixed Term Contract roles from Asset Management firms, whilst the Investment Banks were primarily looking to recruit on day rate contracts.
As is the way during Q1, year-end processes often need prioritizing over recruitment, so although we saw very good job flow, a lot of the processes were dragged out slightly. This resulted in those firms who were willing to keep momentum up, being successful in securing their preferred candidates. However, with bonus season approaching, as well as the increasing confidence across the market as a whole, the candidate market has been very strong which reduced the negative impact of this as firms were able to secure strong backup candidates.
Role Profiles
The opening quarter of 2021 saw a range of roles being released across levels within both Buy Side and Sell Side as firms looked to strengthen their ranks after a disrupted 2020.
A noticeable trend we saw during Q1 was that the senior market was very active. Within our Asset Management clients there was a lot of movement from Manager/VP up to heads of function (£80-150k). With reduced levels of hiring last year it is clear that, now confidence is higher, firms are keen to secure talent who can hit the ground running and help manage teams. The newly qualified market was slightly quieter than usual. This is often the way during Q1 as year-end takes priority.
We saw roles across almost all areas during Q1, but those areas most busy were Financial Reporting/Control and Fund Accounting/Control. As mentioned above, these tended to be at the more senior end and mainly across Asset Managers, in particular alternatives houses or alternative arms of traditional asset managers. It is a space that continues to grow and with the emphasis on year-end processes, the focus was on process and control roles.
Fund Finance was particularly strong across Private Equity, Private Debt, Infrastructure and Real Estate and these hires were often very important hires with high levels of responsibility. A common trend in this space is we are seeing candidates who are currently working in funds, perhaps that have slowed in growth, looking to make the move to numerous funds that are growing at a fast rate and make the most of the growth in this area.
We continued to see a number of newly-created senior in-house Tax roles across both alternative houses and alternative arms of traditional asset managers. The levels of these were consistent with 2020 and tended to be Manager to Director level paying anywhere from £80k – £150k. As is often the way with Tax, a lot of these were fairly niche in nature and ranged from Alternative Funds Tax roles to Indirect Tax roles specialising on Real Estate transactions. More often than not, firms would consider candidates coming straight from practice as long as their client base was of similar to that of the firm.
Temporary recruitment has experienced a significant increase in the number of roles being released at Manager level within our Buy Side clients with the majority of firms opting for Fixed Term Contracts between the £70k – £90k range. These were across a variety of functions, including Financial Reporting, Commercial Finance and Internal Audit. We found that clients looking to hire in their Financial Reporting teams were predominantly looking for candidates with strong consolidation experience at group level and the Commercial Finance roles were heavily focused on revenue.
From our Sell Side clients we saw a steady volume of roles across a variety of departments and these were mostly as day rate contracts, with Product Control continuing to be fairly busy as it was in Q4, across a range of desks. As the quarter progressed we saw an increase in activity within the Regulatory Reporting sphere, with particular focus on the capital reporting space. These roles came at both the senior level and junior end. The senior roles tended to be looking for qualified candidates with strong experience within their field, who could come in and make a difference immediately with little training required (£400 – £500 d.r.), and at the more junior level the sought after candidates would be Newly Qualified Big 4 or Part Qualified with relevant industry experience (£250 – £300 d.r.). In the past, these junior roles have often been filled by overseas candidates from Big 4/CA backgrounds. Due to COVID however, the number of candidates flying over with Visas (Tier 5) has significantly reduced. This has resulted in a reduced candidate pool and meant often clients have had to adjust their expectations, considering candidates from a wider array of backgrounds.
Predictions
As mentioned above, year-end processes often result in a number of control focused roles being released during the course of Q1. As a result, it is quite common for Q2 to bring with it a more value-add focus. Firms are usually willing to commit more recruitment budget to growth and bring in more commercially minded accountants.
We also expect an increase in the amount of newly-qualified vacancies as firms have more time to focus on developing junior talent. The candidate market in Q2 for newly qualified candidates is usually very busy. You begin to see candidates on their third and final year of their ACA graduate scheme start looking for opportunities so they have a good feel for the market come September.
With IR35 coming into effect at the end of Q1, we expect to see a continuation of the increase in Fixed Term Contract roles released. Moreover, with the bonus period coming to an end, we expect the same general trend of movement of candidates looking for new challenges or promotions. Given this, we predict there will be an increase in the number of contract positions opening in the market. We do expect to see a continued flow of day rate contract roles released, with the rates for these continuing to fluctuate in light of IR35, however, we have seen a noticeable difference with the rates being offered as PAYE contracts in comparison with Limited contracts, which has meant that firms have not been meeting the market rate. As a result of this, firms have found it more difficult to find candidates with suitable experience, causing the recruitment process to be drawn out. We hope that firms will adjust to this and the rates will begin to correct themselves to a level that are attractive to contractors, to ensure they do not miss on top tier candidates.