Let me cut to the chase, and you’re reading this blog because you want to know what’s going on in the market, so here are 7 digestible points of useful information on Q3 recruitment trends:
H1 feels like a long time ago now, and the good (or bad?) news is that a lot of that market craziness in terms of candidate supply and demand being out of sync has died down, albeit we are most definitely not in calmer recruiting waters, (yet). Our June, July, and August were exceptionally busy with lots of roles seeking to make offers and get people signed up ahead of the Autumn. But since September, there has been a very small slowdown in demand for new talent as firms look to stock take or put select roles on hold. Despite the outlook in mainstream media, we are not seeing a total slowdown in demand; however, it’s clear that a lot of traditional, as well as alternative funds, are taking stock of who they’ve hired in the last 12 to 18 months when weighing up current or future needs.
The market has been reactive and short-term in its recruitment outlook for the last few years; this is not new news. But what has changed since the summer is how quickly hiring decisions are changing. In some cases, week by week as people change their minds and re-scope a role, put a role on hold, or opt to bring in a contractor over a permanent hire. Broader political and economic factors are obviously at play which isn’t helping with the short-term thinking behind a lot of hiring decisions, and this has led to a significant increase in the medium to long-term BAU contract or interim roles to plug the gap.
Recruitment processes have continued to be hit and miss, with lots of roles dragging on and on and on through multiple rounds of video calls, face-to-face meetings, and tests, whilst others complete quickly and within a matter of days in some cases. With a candidate market that is still barren in lots of areas, running a slick and efficient process is crucial, especially heading into Q4 when candidate commitment levels tend to vary due to a combination of workload, year-end planning, and bonus payouts. We’ve also been recommending a lot of firms skip straight to face-to-face meetings for candidates who look like obvious contenders. As efficient as being able to jump on to a Teams or Zoom call is, it can unintentionally slow down a process and mean you accidentally end up running two first-round interviews.
Bonuses for 2022 are expected to be slightly up from 2021, with most buy-side firms benefiting from favourable market conditions. Bonus buyouts are occurring at all levels of the market, from mid-level roles at £60,000 - £80,000 base salary through to senior appointments; in a lot of cases, it’s the only way a successful hire can be made. Whilst some of this is seasonal and typical of end-of-year hiring, very few buy-side firms have had a poor 12 months, and this has driven up the volume of conversations we’re having when negotiating an offer. Those firms unwilling to offer some form of a sign-on or buyout will struggle to attract the best people out there unless hiring someone who’s recently had their bonus or from a company that doesn’t award particularly high bonuses (i.e., professional services firms). Although that being said, two of the Big 4 recently announced hefty base pay increases and retention bonuses across most service lines – it’s never easy!
Throughout this year and continuing into Q4, people are moving for an average base salary increase of between 15-20%. Occasionally it’s more than this, but the majority of the time, it’s the numbers above. There continues to be a lot of white noise around people moving for obscene increases in base salary at 30, 40 or 50% plus. Very occasionally, this is happening, and more often than not, it’s due to people accepting a counteroffer. Based on what we’re seeing with external moves, this isn’t the case, and three-quarters of successful introductions my team has made year to date have resulted in pay increases of between 15-20%. Being crystal clear on base pay and total compensation has never been more important.
At the newly and recently qualified level, hiring slowed down over the summer into September, and we saw more and more demand for candidates in the 2 to 3 years post qualified bracket, with clients demanding prior industry experience over first-time practice movers. This is still a key theme heading into Q4, and finding genuinely good talent in the 2 to 5 years PQE bracket remains incredibly difficult, as this level has been heavily sought after for the last 12-18 months across all areas of Finance. The good news is that newly qualified accountants are in plentiful supply, with a new wave of qualified candidates coming to market and keen to make a move. Audit first-time movers are increasingly keen to get into Finance roles in both core reporting as well as funds finance and operations. Whilst there will always be a number who try and make the move into something commercial or front office linked, the last few months have seen a steady increase in newly or recently qualified accountants happy to jump into industry into bread and butter Finance roles.
Lastly, flexible working! This remains high on most job seekers' lists, and per previous updates, it is increasingly becoming a deal maker or deal breaker, depending on whether a company has embraced the future of work. Most firms seem to have settled on some form of hybrid working, typically 3 or 4 days in the office, and those that insist on Finance employees being office based 5 days a week run the risk of becoming out of touch very quickly.
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