Insights

Finance & Accountancy

FINANCE MARKET COMMENTARY, Q4 2019

• Article by BRUIN Financial

FINANCE MARKET COMMENTARY, Q4 2019

MARKET OVERVIEW

The final quarter of 2019 saw a job flow with a bias towards Asset Management over Banking and Insurance. With a last snap general election called in December there was a cost sensitive mentality industry wide towards the start of the quarter. This elongated hiring processes which were more consensus driven, resulting in a number of clients missing out on preferred candidates. Those clients able to act swiftly and decisively at all stages, from CV submission to offer, were more successful in securing the top talent.

 

Post election, the likelihood of a more stable political outlook and inevitable delivery of Brexit stimulated the market. Candidates were more positive about moving roles and refocusing on their long term career goals over the short term stability offered by their current position.  It also meant clients were more inclined to commit to hiring plans for the New Year, which further increases the interest from a candidate perspective in the market.

 

Our Investment Banking clients have had a lower volume of hiring throughout 2019 and this trend continued in Q4. One major driver around a reduction in the number of permanent roles has been due to the conversion of significant volumes of contract staff to permanent in light of IR35, so the need to recruit talent externally has been reduced. Whilst a number of contractors were converted into permanent employees, a large number of contract candidates have aimed to extend their assignments to the latest possible date before IR35 comes into effect in early April.  As a result, some clients adhered to this trend and we saw roles being released as 3 months rolling contracts on a day rate, as opposed to the typical 6 months initial durations we have usually seen in the past.

 

IR35 in general has of course been a hot topic across recruitment for the whole of 2019. However, Q4 brought a bit more certainty with a lot of Clients starting to set clearer procedures and deadlines for the implementation of their IR35 policies in Q1 2020. Naturally, we saw a significant increase in the number of Fixed Term Contract vacancies released by our clients, in comparison to Q4 of 2018.

 

ROLE PROFILES

Q4 2019 saw a mixed range of roles being released, with a particular demand for qualified accountants possessing a strong technical background. Both Buy Side and Sell Side clients sought Newly Qualified candidates as well as seasoned professionals with solid Financial Reporting experience.  In the Regulatory Reporting space, most vacancies sat in Capital Reporting and successful candidates possessed a mix of accounting and ICAAP knowledge, as well as an understanding of risk concepts.

 

Financial Control within Asset Management (£55-£120k) has also been an active area across Q4. Additionally we have seen Internal Audit roles (£60-75k) within Insurance, Asset Management & Banking. Within both these areas, knowledge and experience within the asset class / area of business of the hiring firm has been a pre-requisite.

 

On the Investment Banking side, there was minimal demand for Product Control professionals throughout most of 2019. However, Q4 was surprisingly active in this space, with Sell Side clients looking for Product Controllers that were either at junior level and possessed an accounting qualification or experienced professionals with in-depth knowledge of complex, exotic products.

 

Interestingly, on both the contract and permanent sides we saw an influx of requests for In-House tax professionals. Asset Management and Insurance clients were looking for specific Indirect or Direct Tax knowledge and for some niche roles; successful candidates possessed a good understanding of other European tax regimes and/or experience working for large organisations at Group level.  As a result of the Tax market being candidate-driven, the salaries and day rates on offer varied, with clients becoming more flexible on remuneration in order to secure their preferred professional across Tax.

 

PREDICTIONS

Early Q1 will be a quieter period for new roles due to Year End and Bonus season. There will be an increase in candidate registrations across all levels as candidates seek to secure a move before H2 to secure the maximum bonus for 2021 in a new role.

 

As the financial attractiveness of Contracting has become more questionable, some experienced professionals will be seeking the security of a Permanent role. However, from a client perspective, we expect the demand for a flexible work force to remain constant throughout Q1. Day rate contracts will certainly continue to be released in Q1 and throughout 2020, but due to the impact of IR35, most of them will probably be released on a PAYE basis, at least until there will be more clarity on the implementation of this legislation.

 

Additionally, clients have so far tended to offer the same salaries for Fixed Term Contract assignments, in line with what they pay their permanent employees in similar capacities. If this trend continues, it is highly probable that the pool of talent across the contract market will be reduced.

 

The strongest candidates will be lacking motivation to undertake a Contract assignment, when they are no better off financially than if they were a permanent employee. Some Clients have previously aimed to secure quality candidates on fixed term contracts by offering a financial premium on top of the equivalent permanent salary and this trend may continue in Q1 2020, potentially in the form of completion bonuses.

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For more information about the market or current opportunities please contact one of our Consultants.