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Buy Side Finance Market Update (Q2/Q3)

It’s mid-July, the summer weather is back and as we draw closer to the four month mark of the ‘lock down’ in the UK I’m pleased to be able to write a brief update of how the recruitment market is faring across the Accounting and Finance world in buy side financial services firms.


Over the course of Q2 the two main recruitment related challenges firms faced were general market uncertainty – ergo slow processes and lack of decisions being made – coupled with many companies, especially smaller organisations, still wanting to meet people face to face before making a hire. This was mirrored on the candidate side too and many mid to senior level Finance professionals especially were wary of accepting a role without meeting their prospective line manager face to face. Thankfully this is now possible and we are in a much better situation in Q3 compared with four to six weeks ago with a lot of processes now aiming for final interviews to take place face to face, where both the hiring manager and candidate(s) are willing, able and comfortable meeting socially distanced. As simple as it sounds I don’t think a lot of organisations could break past the psychological barrier of not being able to meet people face to face and this did impact the interview process for some vacancies we worked on over April, May and June.


On almost a daily basis I’m asked if there are still a lot of candidates looking? The short answer is yes and there are a lot of passive candidates on the market but a smaller than normal pool of active candidates. I would say that across the board there have been more Accounting and Finance professionals made redundant compared with the last market downturn in 2008/2009 but this seems to be concentrated in commerce and industry and professional services, less so in financial services. There is also still unfortunately a very large number of contractors who are immediately available as well as people ‘caught out’ travelling overseas or on career breaks all searching for work in what can at times look like a candidate rich and job poor market. In March and April, we saw a lot of active candidates rein in their job search citing market conditions although I’d say this attitude has shifted over May and June with a high volume of passive candidates open to a move for the right opportunity and meaningful step forward in their career. We’re also entering the second half of the year so bonuses will start to become an issue for some active or passive candidates. Despite broader market uncertainty, lots of alternative funds and asset managers will still be forecasting meaty pay outs come December and Q1 next year meaning now is a very good time to be adding headcount; the calm before the storm so to speak.


In terms of where the market is busy, there is still a reasonable volume of hiring happening at the newly qualified up to senior accountant and finance manager level (c£50-75,000 base), particularly across venture capital, European focused private equity funds as well as private debt in all its forms. Whilst it’s still incredibly difficult to raise capital, close on deals and spend cash you already have committed, funds are still hiring and investing into Firm Finance and Funds Finance albeit not quite at the volumes they were in Q1 this year and the back end of 2019. From the vacancies we have supported hiring for and from what we’re picking up on the grapevine it’s mainly larger managers with deeper pockets who are investing in new talent. In my opinion, the breakdown of new positions is roughly two thirds replacement hires for people leaving or due to restructures and a third new positions linked to growth.


Across traditional asset and wealth managers the market has been relatively quiet in terms of new positions coming out to the market, with the exception of a few well known US managers who have continued to hire and grow their Finance teams across mostly financial and regulatory reporting. Direct hiring has increased across bigger funds, which of course makes complete sense in the current market where you probably have a bit more time to run a process and where all forms of cost are under the microscope.


At the senior end (c£80-150K base salary) the market remains hit and miss; there are definitely roles out there and demand to hire, processes remain quite slow, a healthy percentage of people are open to a conversation or a move however at this level meeting key stakeholders face to face remains critical. Similarly, many funds have scrutinised non-revenue generating cost in ways I haven’t seen in a number of years, partly for obvious cost saving reasons during a tight market but also linked to the challenges managers continue to face around raising and deploying capital. Your net result being a slower than usual market for senior buy side Finance professionals.


On the Contract side there is still a reasonable volume of BAU as well as project work coming through albeit lots of firms are trying to push towards fixed-term contracts in order to save cost. Day rates have taken a bit of a hit in some areas – especially fund accounting – and as you’d expect there’s been a lot of short term (<6 months) positions coming out linked to immediate needs, i.e.: back fill whilst a permanent person is recruited for, systems implementations, cost cutting initiatives. Overall, there still is quite a lot of choice from a candidate perspective with contract roles benefiting from a larger than normal pool of immediately available candidates who are from more permanent backgrounds.


Most conversations I am having with candidates and clients alike tend to include some discussion around their return to the office plans and expectations of the next 6 months. It seems like most organisations are in planning mode and September time is when the vast majority are expecting to have employees return to the office for some of the working week. There are quite a few companies who have already opened their doors and let people return two to three days a week albeit this seems to be more on a voluntary or ‘needs must’ basis. I have heard a few negative stories here and there around people being told it is expected that they should start to make the effort to come in, but this seems to be the exception rather than the norm. Although this may well change in the coming weeks given the change in rhetoric from the government. What is very clear from mainly conversations I’ve had with HR contacts is that flexible and agile working is here to stay, for both safety and productivity reasons, although I don’t know too many companies who have drafted official remote working policy documents for beyond the next few months.


That’s it from me this quarter and here’s hoping for continued positivity in the market.