Q1 Started in a rather cautious fashion with many clients in the asset and wealth management space. This has been caused by many external factors such as the slow down with China causing Emerging market funds to be shedded. There was also a pause and re-think moment with MiFID 2 being delayed for another year. Many Asset Managers are also under pressure with margins being pushed down and clients focusing on passive fund management.
Similarly, Q1 of 2016 has also seen a slow start for the majority of Investment Banking clients. There has been a level of uncertainty and hiring freezes that have led to longer recruitment processes for permanent positions in particular. On this note, a lot of clients have been looking to hire candidates on a contract basis to get the necessary headcounts approved sooner rather than later.
The start of Q1 was a quiet time for hiring from a risk perspective and though that is often the case, it seemed that this period extended into latter stages of the quarter. Due to the nature of risk change, the majority of roles in this area are focused within large Investment Banks. With the continuing struggles that have become apparent in this sector and widespread hiring freezes, there has not been much recruitment activity.
Due to the financial pressures in the industry, clients have been looking to keep projects promoting generating financial benefits. This has led to a number of clients bringing in Financial PMO’s that focus on the business benefits of the projects whilst instilling a rigid governance and framework to the delivery process. As is normally expected, Q1’s demand is based on replacement of candidates leaving their roles for various reasons including their bonus’s. Therefore the hiring has been across the change space including OMS delivery, regulatory change, data management and TOM work.
From an operations perspective, the first quarter of 2016 has seen a demand for more candidates from an OTC background particularly within Equities, Interest Rates and Credit. In addition to these areas, employers have demanded candidates who also have an understanding of regulations such as EMIR, DODD Frank and MiFID. Investment Banking clients have been recruiting for various process improvement and re-engineering projects hence, there has been a need for candidates that are qualified in LEAN Six Sigma and Operating Model Design.
Due to the previously mentioned pressures on Investment Banks there has not been large amount of expansion in risk and compliance change teams, meaning that the majority of roles were due to attrition. The announcement of the Basel committee stating the FRTB deadline in 2019 has allowed banks to plan for this more effectively increasing requirements for candidates with exposure of FRTB projects.
The regulatory pressures of MiFID 2, PRIPs and Solvency will continue to be hiring focuses with Asset and Wealth Management firms. With bonuses not quite hitting the mark with a lot of firms some candidates might look to move elsewhere, therefore this quarter we will see more movement across the industry, however with the Brexit referendum coming up in June some clients may demonstrate a continued level of cautiousness, therefore only the projects that are absolutely imperative will get the budget for hiring.
There are also indications that the Investment Banking market in 2016 should become more buoyant therefore recruitment is more likely to pick up from mid-Q2 and Q3. The majority of clients seem to be positive about their future budgets and some of the hiring freezes have been already lifted. On the candidates’ side, the recent bonus payments have resulted in a number of candidates now looking for new opportunities. We are optimistic we will continue to see movement in the Regulatory space with line managers across Banks making this a primary focus.
The current situation of uncertainty in banking clients is likely to mean that hiring may remain steady over the next quarter of the year. However, increasing regulatory pressures and low bonus payments may lead to attrition in risk and compliance projects. This market is generally dominated by contractors and with the pre mentioned factors; this is expected to remain the case.