Q3 followed a similar trend to Q2 in that processes were often slowed down as a consequence of key decision makers being on holiday. Whilst the market isn’t as candidate-driven as previously, delayed processes are causing hiring managers to miss out on their preferred candidates. There is still the continued emphasis on moving quickly on candidates as they are often in multiple processes and on occasion, it can come down to which company offers the candidate first. An unsurprising consequence of this is that candidates are receiving higher wages than they’d normally receive in regular market conditions. However, what has been an interesting occurrence to note across the market, is the unintended discontent these inflated wages have caused. Firms have often had their budget set for recruitment at the start of the year, so having to overpay for candidates has meant they’re not able to get as many resources in as normal. As the volume of the work has stayed the same or increased, this is leading to members of the team being overworked, as there isn’t the normally available headcount. The aforementioned discontent is often more strongly felt by more long-standing members, who haven’t benefitted from inflated wages but are suffering from long working hours. The solution clients have often turned to, is to take on contractors. This serves as a cheaper and quicker alternative to help manage the workflow for the whole team, as well as a good opportunity to bring in a new skill set to support any ongoing projects etc.
Linking to the above is the new flexibility seen by hiring managers when it comes to taking on contractors. As there is often an immediate need for headcount in teams due to volume demands – taken on new clients, incumbent team members leaving etc, it is often the case that managers are having to accept that the ideal background isn’t necessarily in the market in that instance. Historically, hiring managers have been in positions whereby they can find candidates with the most aligned profiles with the vacancy. However, due to this being a candidate short market, especially on the contract side of things, this hasn’t been possible on several occasions. Therefore increasingly, after a role has been out for a while, hiring managers are opting to go for candidates that come from different backgrounds, but that they could train to fulfil the role. Where firms are having success with this, is coming to this realisation sooner and identifying profiles that have the necessary transferable skills and making a decision on them – slightly different product/system experiences as examples. One can see that frequently, profiles have been put on hold and then reconsidered in future, but the candidate is then off the market.
Following the end of the pandemic, lots of companies have re-evaluated their previous BAU processes and have decided they’re now in a position to commence projects to automate and improve their existing processes. This has created a large demand for candidates across Operations, especially at the more senior level. As these roles are often the backfill for the core team, the contractors that come in tend to need to be more senior as they need to be able to come in and hit the ground running.
Middle office roles have stalled in activity this quarter, especially seen on the banking side. As day rates were climbing as companies were trying to secure the best talent, contractors on short notice periods were provided with the mobility to move frequently to secure better rates. This became self-reenforcing, as the constant moving drove the inflation on, but also, from working at several firms, candidates in this space were able to build their networks more quickly. Consequentially, contractors would know of firms paying higher rates from former colleagues and would therefore look to move.
FX-focused roles have also seen a rise in prominence over the course of the last quarter. This is arguably unsurprising considering the various changes in interest rates and extremely high inflation globally. The difficulty companies are finding, is that FX focussed roles have largely been outsourced and hence, there aren’t the candidates available to match the demand. Candidates in this space, therefore, can demand high wages as they’re in such short supply. To resolve this issue, clients are having to opt for candidates with different product experience, which would best place them to pick the role up as quickly as possible.
For Q4, one can expect accelerated recruitment to counteract the stalled recruitment in Q3. Whilst this can be expected across the industry, this is more likely to be the case for contractors. Firstly, depending on when clients budget, anything left over in the latter stages of the year, can often go towards temp candidates, for teams that need extra support. Secondly, due to the potential of an upcoming recession, historically clients choose to hire contractors over permanent employees. This often serves as a cheaper investment versus a permanent employee and is also safer if the company faces real financial difficulty in an economic downturn.
Finally, it’s increasingly the case that candidates are being expected to be in the office. It was previously the case that clients might use flexible working as a bartering chip when competing for a candidate, but this has become less frequent as time goes on. It’s very rarely the case that roles offer fully remote/1 day in the office, and much more likely that it’s 3 days plus. As companies are insisting on this across the board, it’s become more difficult for candidates to demand it.