Within the financial sector, fears are increasingly being voiced that public and media pressure will lead to problems for the banking industry. Public outcry over bonuses, fed by politicians searching for easy sound bites, recently led to RBS CEO, Stephen Hester declining his £930,000 annual bonus. Pressure on bonus pay outs has grown across Europe with the EU advocating a cap on bonuses to a maximum of twice annual salary and the on ‘golden hello’ payments.

The current pressure on bonuses is however giving rise to severe misgivings within the banking industry and fears that bonus restrictions will ultimately damage competitiveness and lead to recruitment problems. Many within the industry believe that bonus restrictions will inevitably lead to significant salary increases as institutions compete for the best staff. This may lead to some banking operations becoming uneconomical due to significantly increased basic salaries. While big bonuses grab headlines, they are linked directly to performance and therefore justified on results, whereas large salaries will have to be paid regardless of performance.

Both Prime Minister David Cameron and leader of the opposition Ed Miliband have expressed concerns about banking bonuses, but recently industry figures have started to urge caution on interfering in the market. Labour peer and entrepreneur Lord Sugar has warned that ‘bank bashing’ by politicians could further depress the industry, which is struggling for stability following the recent years of crisis within the financial sector. He warned that restrictions on the banking industry could lead to talented personnel leaving the sector.

The Minister, speaking at the City offices of global reinsurance broker Willis Re, praised the London insurance market as a global leader that made a significant contribution to the British economy. Last year the UK insurance industry contributed £10 billion in taxes and derived 30% of its premium income from overseas – making it one of the most important export industries.

The UK insurance sector provides 300,000 financial services jobs and London is the world’s leading insurance market, attracting a large corporate presence from major insurance companies from around the world.

The insurance industry offers a wide range of financial services jobs with challenging roles. Actuaries and underwriters assess premiums based on the calculation of risk. Due to the international nature of the London market, some insurance covers potentially enormous losses – far too big for one company to consider by itself. As a result, London is the world’s reinsurance hub where the risk is shared around a number of different companies. On the claims side of the insurance business are other financial services jobs including claims examiners and loss adjusters who assess a company’s liability in the event of a claim.

Insurance offers a rich and varied career in financial services in a challenging and competitive environment with a significant international element.

Unfortunately, however, the process of sorting through a mountain of CVs to fill a skilled executive position is not only a significant logistical challenge, but often will not result in a satisfactory candidate shortlist. This is especially the case in such a vital economic sector as banking and finance, where an executive is likely to bear huge responsibilities.

Using the skills and knowledge of a recruitment agency is tried and tested as the best way to fill the most senior positions in the banking and finance industries. A recruitment agency can actively search for personnel with the particular skills and experience required for a senior role. If required, the recruitment agency can specifically target a very narrow skill set. Equally important for many banking and finance firms, an agency can screen all unsuitable applicants – leaving the potential employer with only the most suitable applicants.

Specialist knowledge is crucial: it is vital that firms involved in banking and finance choose a specialist executive selection agency which understands the demands of the sector.

The result of the cutbacks means increased competition for banking and finance jobs. The labour market can be particularly daunting for people who have held a secure position role for a number of years. Potentially, finding a new job can be an intimidating prospect – but there are a number of steps that can make the route back to employment easier:

1. Self-assessment – carry out a ruthless and honest assessment of the skills you can offer an employer
2. Consult an expert – the labour market is extremely complex; a recruitment professional that specialises in the finance and banking sector can offer valuable insight into the specific skills that are in demand from potential employers.
3. Refresh and increase your skillset – after establishing which skills employers most require, refresh your knowledge of these areas and be prepared to learn new skills to bring yourself right up-to-date on current thinking and requirements.
4. Monitor the industry – use the many tools available on the internet that discuss what is happening in your specific segment of the finance and banking industry. Use news alerts, RSS feeds and industry leading websites to keep on top of industry trends.
5. Follow potential employers – if you can identify potential employers, follow them closely through their websites and social media portals. This will give you a head start if positions become available and may present you the opportunity to be proactive in your employment search.

Losing a good job can be a considerable setback, but there are always opportunities available and following these five steps can offer a route back to employment in the finance and banking industry.

According to the report, the biggest demand for new permanent staff was registered in the engineering, construction and IT sectors. The report also revealed a slight fall in demand for temporary and contract staff during January.

The news of an increase in the number of jobs is very much welcome after official government figures revealed that in the three months leading up to November 2011, unemployment in the UK had reached its highest level in almost 18 years. However, the number of new unemployment benefit claims was less than anticipated in December and this may be an indication that the jobs economy is finally on the rise again, albeit slowly.

Kevin Green, REC’s Chief Executive, acknowledged that the report indicated a small, but welcome, improvement in the labour market. However he also cautioned of the ‘disconnect between what employers are looking for and what job seekers can offer’ and highlighted this as a major challenge for the recruitment industry.

We posed the question of whether banking & financial services employers were indeed on the road to recovery, and whether employees felt that internal change was for growth or simply for survival.

What has emerged is an environment where there is great concern over market volatility. Those surveyed anticipated that the majority of hiring in 2012 would take place in the first quarter. The reality is that hiring activity, where it is taking place, is still very much tempered with caution with many employers yet to release budgets or increase headcount in 2012.

With fewer job opportunities in banking and financial services available for employees to progress their careers, the banking & financial services workforce will need to focus on what they can do better in their role so that, when an upturn does come they’re top of mind for promotion and will have gained some good experience if they wish to move organisation.

Hiring plans

Then: 63% of employers expected to increase their headcount over the following 12 months
Six months on: 52% of employers now anticipate increasing headcount during the next year

Of those planning to recruit, over 85% of organisations anticipate this taking place in the first half of 2012, citing opportunities for expansion into new business areas and growth in existing areas as the main drivers, as opposed to simply due to the release of new budgets.

This suggests potentially more green shoots in 2012, with over half of organisations hiring based on positive growth predictions, with a clear hiring strategy in place to ensure the necessary resources.

For those not hiring it may mean increased workloads for incumbent staff so there will be a need to positively manage morale through employee engagement.

Attracting talent

Then: 69% of employers believe that the level of base salary affects their ability to attract talent.
Six months on: 89% of employers believe that the level of base salary affects their ability to attract talent

Significantly more employers now believe that the level of base salary is critical in order to secure top talent.  Bonus potential, wider benefits, good leadership and opportunities for career progression were also cited as major drivers.

Paradoxically, almost three quarters (72.7%) of employers did not perceive it to be harder to attract talent now than 6 months ago, provided they are in a position to meet the necessary salary expectations.

City bonuses are still under great scrutiny & reports show bonus levels being lower than previous years. Employees should expect this to continue in a volatile market.

Employee motivators

Then: 48% of employees said that money is not their only motivation
Six months on: 50.0% of employees said that money is not their only motivation

Employees are more motivated by factors other than money. Over half of employees stated that quality of work (54.5%) and career progression (52.2%) motivated them.

Employers have done some work around promoting internal career progression opportunities via succession planning, internal mobility programmes and demonstrating career paths to employees. Quality of work might be more challenging to influence.

It is therefore important to identify what employees value in their work and highlight the aspects of their role that match their values. In addition to this hiring managers need to demonstrate the value that an employee brings to an organisation – line managers can be the greatest influence on employee engagement.

Retaining talent

Then: Almost 80% of professionals anticipate moving jobs within the next year
Six months on: 92.7% of professionals anticipate moving jobs within the next year

Most employers (83.1%) believe it’s not any harder to retain talent now than 6 months ago. Most (88.9%) also cite level of base salary as by far the main driver in terms of whether or not they are successful at retaining talent, as per initial talent attraction.

Over 60% of employees feel some level of engagement with their current organisation. They too cited level of base salary as their major motivator within their existing role (60%) with career progression and quality of work next in line (50.9% and 47.2% respectively).

Nine out of ten (92.7%) said they are looking to move jobs within the next 12 months demonstrating that, whilst they feel some level of engagement and loyalty to their existing employer, they are actively pursuing other opportunities.

Having endured a sustained period of ‘career survival’ many employees are now re-focusing on career development and therefore are driven more by what a new employer could offer on this front.

This career planning may be tempered by volatile market conditions affecting job security whereby “career survival” may continue further in to 2012 than initially anticipated.

Main drivers for change

Then: Over 90% of organisations saw cost efficiencies as the main reason for change
Six months on: 58.5% of organisations saw cost efficiencies as the main reason for change

Cost efficiencies remain the main driver for change. Other factors have come in to play. Increased regulation (52.3%) and change to political and/or economic stability (43.1%) feature highly. Could it be that now many costs have been cut, other changes have more focus on them or are employers anticipating more new regulations coming into force?

Looking forward, almost half (42.9%) of organisations believe the political and economic landscape will have the biggest impact on the industry over the next 6 months.  Most employees (52.7%) also cited the change to political and/or economic stability, followed by increased regulation (17.1%) as having the greatest impact.

What do you see happening over the next 6 months? Tell us below.

With many change programmes underway in Scotland, notably in the banking and financial services industry, there has been a modest rise in demand for HR contractors for redundancy and restructure programmes. Employers are increasingly looking for candidates with technical skills to support complex projects.

Euro zone debt crises continuing to add uncertainty to the economic climate so we are still seeing cost cutting exercises taking place meaning that employers are becoming more risk averse. Demand for financial controllers and directors is low whilst the candidate pool expands resulting in more competition for qualified roles at a senior level.

With the increased demand for closer financial controls in the banking sector, employers are increasingly looking for ‘Big 4′ qualified professionals who can bring expertise in financial controls. However, with markets as volatile as they are, fixed term or day rate contracts are becoming more prevalent as organisations try to keep their workforce flexible.

Due to continued Basel capital requirements and regulatory change, employers have been looking for more specific skill sets including Basel III, credit risk, and modelling experience, as well as focussing more on systems skills such as SAS and SQL.

Funding for housing associations is being restricted so we anticipate that social rent will be forced upwards. We expect that opportunities to develop subsidiaries to explore mid market rents will arise, generating demand for staff such as private sector leasing officers with lettings sales experience from entrepreneurs as a result.

The prevailing opinion among finance industry leaders meeting at the World Economic Forum at Davos last week was that retrenchment and contraction were the best ways for companies to deal with the current economic conditions so it looks as though finance jobs will remain short on the ground for the immediate future.

One solution for those looking for employment in the financial sector is to consider their availability for temporary work assignments. Increasingly companies are looking to employ people in short term roles or on a temporary basis as a way of defraying their wage bill. Temporary work is something that many job seekers in finance sector would not have previously considered and many people view temporary work as either a stop gap or a measure of desperation. However this ignores the reality that many temporary finance jobs offer challenging and interesting positions including work in management, analysis, investigations and administration. The companies appreciate the expertise and experience a skilled temporary worker can contribute and for the worker it is a chance to increase their knowledge and contacts within the industry.

With a number of key regulatory requirements impacting financial services across corporate governance (i.e. anti money laundering, client money and MIFID, international regulation Basel III, capital adequacy and Dodd-Frank-OTC client clearing), additional project headcount is needed for policy based roles, OTC clearing staff, divestment business analysts, credit risk analysts and RWA analysts. We expect that regulatory change projects will remain constant given that most banks are working towards delivering mandatory requirements.

A number of developed markets are under-delivering in the current volatile economic climate. As a result the fund management industry is increasingly turning to emerging market funds so we anticipate candidates with emerging market fund experience will be in demand throughout 2012.

Following the demise of a number of high profile organisations, the risk & compliance teams at a number of leading banking and financial organisations are being bolstered. Demand has risen for temporary KYC / onboarding candidates with more of a regulatory focus to ensure that the compliance systems and other controls in place are adequate enough to support the risk strategy of the business whilst senior level candidates are in demand for permanent roles within investment management.

The survey polled financial executives at 600 leading UK companies and found that although 69% favoured a change in reporting regulation to the internationally accepted standard, 54% had not yet begun to assess effect of the changes. A further 61% admitted that they had not even considered the tax implications of the new regulations.

This level of unpreparedness provides an excellent opportunity for professionals looking for accounting and finance jobs to demonstrate their ability to add value to a company. They should familiarise themselves in detail with the impact the switch to IFRS will have and how a company can minimise any potential problems relating to the change. To be able to speak knowledgably about the changes at interview will provide a powerful demonstration of the valuable contribution a candidate could make to any company that will be affected by the change in financial reporting standards.