2015 seemed to begin with a level of uncertainty, possibly due to the impending election, as budget sign offs were delayed and there was little commitment to increasing headcount amongst lingering hiring freezes. Perhaps as a consequence, there has been a notable number of clients who have looked to make contractor roles permanent once sign off has been achieved.
As Q1 progressed, regulatory change was still a strong focus (particularly MiFID II, FATCA CRS, EMIR etc) and demand began to increase, firstly with a focus on senior Project Managers, essentially to get governance in place and projects defined.
We saw a slow movement on the request of hires from our investment banking clients. This was due to restructuring within the business and decisions on budgets. However in the second part of the quarter we have seen an increase in contract roles being released within the risk and compliance space, as an effect of new risk regulations being implemented in the months to come and the need to prepare for these. The risk space is one of the most competitive markets at the moment. Our clients are looking for specific skills within their area and hands on candidates, especially in respect of the senior Project Managers. There is a tendency with some of the clients to replace contract roles with permanent positions and we are seeing a number of new regulatory programmes rolled out. For example, ICRA in the Credit Risk space and the Fundamental Review of the Trading Book (FRTB ) in Market Risk, which clients and candidates see as a natural extension of BASEL III.
The operations side has been relatively quiet, apart from the usual regulatory commitments work streams, and whilst there is greater competition for roles in Investment Banking, we have noticed that the roles are much specialised and require specific skills or system knowledge. Candidates with Big 4 Consultancy background for example, have been in greater demand for permanent positions.
A number of the banks have changed the way bonuses are paid in order to reward long-term performance and take into consideration the business results and the success of the project. Bonuses for permanent candidates have averaged at around the 10% to 15% mark for permanent employers. The largest bonus seen this quarter has been 50% of basic salary within the projects and change space for risk within investment banking.
Overall it is still very much a candidate driven market and competition for the best often resulted in multiple offers, counter-offers and buy backs.
On the Investment Banking side, regulatory candidates for the contract market were in high demand, whereas Asset Managers were still looking to fill via the permanent route. Business Analyst positions were predominately IT focused projects, such as system implementation and process improvements, data, platform and salesforce, whereas Project Managers were predominately regulatory and client focused.
There has also been increased focus on the Regulatory space, across both the contracting and the permanent market. This is due to a number of reasons, including the ongoing regulatory changes and the obligation of banks to stay compliant.
Contract roles have predominately been for Business Analysts, with rarely much above AVP level, and tend to be very specialised Business Analysts or Test Manager roles with focus on system knowledge. Increasingly, clients have looked to fill positions with permanently, rather than through a contract role and are focusing on the VP level, with little at either the junior or senior level.
Role requirements within projects and change are becoming much more specific. This coupled with the general seniority and experience required for those roles is seeing strong candidates being able to command very competitive rates for themselves. Because of the specific nature of job profiles this quarter uncompetitive rates on contract roles are remaining open for a long duration as experienced candidates prefer to wait for what they consider the right role and the right rate.
2015 looks like it could be another busy year in recruitment. In terms of pressures on clients that will need to be addressed, there are key regulatory deadlines which have to be met as well as general reporting and management information which has to be improved for a number of clients so new systems/enhancements are likely to be introduced.
We are also seeing a sense of confidence from candidates; those that have not moved for fear of losing job security are now starting to consider a move. There are some frustrated candidates who cannot secure a promotion or pay rise internally who will look to move externally this year.
Going forward, the urgent regulatory requirements will continue to lead to high levels of recruitment but less urgent recruitment needs will be subject to lengthy sign-off processes. A continued approach from Asset Managers to M&A will create work for Project Managers and Business Analysts in the integration and system implementation world. Permanent candidates will be the hardest to come by and will continue to get the most offers and as such will be looking beyond just remuneration to make their decision.