Banking Finance, Regulatory and Treasury Market Update - December 2020

Female businesswoman excused from a meeting to take a phone call

Talent Talk with Robert Walters is our global podcast series bringing together business leaders, recruitment experts and career growth specialists to share their insights and views on the latest hiring and career growth trends.

In this episode Daniel Connors and Richard Johnson bring you the latest financial services market update. The update covers trends across the market, including the impact of Covid-19 on hiring trends, how the crisis has reshaped the Banking Finance, Regulatory and Treasury market and looking ahead into 2021.

 

Daniel Connors
Associate Director
Robert Walters

 

Richard Johnson
Principal
Robert Walters

E: Daniel.Connors@robertwalters.com
T: 0207 509 8271
LinkedIn

E: Richard.Johnson@robertwalters.com
T: 0207 509 8834
LinkedIn

Transcript

Daniel Connors:
Welcome everyone to Talent Talk with Robert Walters, my name is Daniel Connors and I head up the Financial Services division in London. I'm delighted to be joined by one of the Principals on the financial services accounting team, Richard Johnson. Richard specialises in the senior accounting finance market in London and he's joining us today to give us a bit of a recap of 2020 and then also to share his thoughts on what he thinks is going to happen in the market, looking forward into 2021. He’s going to look into his crystal ball for us. Richard, Covid-19, probably the topic everyone's talking about. How has it impacted Banking, Finance, Regulatory, and Treasury in 2020?

Richard Johnson:
Needless to say, it certainly has been a turbulent year, I’d say one of two halves, we experienced a sharp and rather severe decline, followed by continual growth in development, and breaking that down, beginning of March, end of Feb. I think the whole sector had to rapidly adjust to remote working models, so hiring naturally went on pause, whilst business leaders and teams, employees, etc. all adjusted to their new processes, new routines, getting hold of software and hardware to effectively work from home. Firms did experience a benefit, I would say, you know, employees being able to demonstrate their work ethic, take up more responsibility, and we saw that consequently resulting in internal promotions. So yeah it's been quite an interesting first part of the year, at least.

Daniel Connors:
You mentioned that there was a pause on hiring. To delve into a little bit, was there a higher degree of scrutiny placed on roles?

Richard Johnson:
Absolutely. I mean, obviously the approvals that needed to take place to get hiring signed off obviously increased, critical hires were obviously deemed necessary and were permitted and Regulatory and Treasury, I’d say above more orthodox finance areas were certainly considered critical and particularly because of the pressures experienced by the regulators, which we can discuss later. I think once those firms got the costs under control, they’d utilise the furlough scheme, implemented the working from home and operating models. The pandemic began to be viewed as something well finite, something to work with, and around, and that's when we started to see things develop I’d say.

Daniel Connors:
I think we saw that across the market where people realised, particularly in Financial Services that the world kept spinning, there was a need to continue operating and trading on a day to day basis. Is there anything specifically within Finance, Treasury and Regulatory that you noticed across Banking and Financial Services with regards to this?

Richard Johnson:
Yeah, certainly the pressure on the Regulatory teams and the Treasury functions has been unrelenting, and finance to a lesser extent despite the pandemic, from the regulators and auditors, the focus on Liquidity, Capital, Thematic Reviews, IBOR, and then we've got Brexit. It's all impacted those functions, whether it be reporting policy or accounting, demand at all levels has outweighed supply and I'd say for Finance and Accounting teams, specifically, they've been on a bit of a journey. The initial demand was to get controls and processes in place, but then as the year has evolved, attention has been paid more toward Financial Planning Analysis, Finance Business Partnering, simply because firms want to manage their costs and budgets and maximise revenue opportunities.

Daniel Connors:
I think that's been again industry wide, as firms felt more comfortable with the state of play as it was and viewed things as quite finite, they started to look into the future a bit more and tried to identify potential opportunities in fact. You mentioned there briefly around the candidate market and where demand exceeds supply for the quite specific and technical roles. What was the overall effect on the candidate market through 2020?

Richard Johnson:
We can't avoid the fact that firms have had to make some tough decisions, whether it be around restructuring. redundancies and that's naturally brought candidates to the market. Generally speaking, across all sort of white collar Professional Services, whilst we've seen an increase in candidates coming to the market for certain areas, requiring subject matter expertise, there are still skill shortages. With professionals in those areas of employment being far less proactive in searching, those that would have considered a move in 2020 probably more reluctant for obvious reasons and wanting to see what 2021 brings. The news of the vaccine, I think we certainly increased confidence in that market and hopefully those that were considering a move this year will look to do so next year thus stimulating the market.

Daniel Connors:
Do you feel there was a real fear of last one in, first one out for candidates?

Richard Johnson:
Yeah, absolutely. I think that's certainly been witnessed through counter offers. This year, those people that handed notice have entertained counter offers or actually accepted them, more so than they probably would have done in other years. I'd also say the expectations of candidates have evolved this year as well. Security, well-being, learning and development, things that are hard to quantify, but they're becoming increasingly important and huge deal breakers for those people that are considering opportunities.

Daniel Connors:
I think the amount of counter offers we have seen through the years is actually an indication also of how hard it is for firms to hire, particularly in very technical roles. They recognise that losing a member of staff, a critical member of staff, the challenges in replacing them and the cost involved in that, is quite high.

Richard Johnson:
Yeah, absolutely, being creative in 2021 is certainly going to be key. As we look into 2021 and we're thinking about what I guess the biggest trends across those areas of Finance, Regulatory and Treasury, we started to see it already, the themes have already been emerging, but I think it's going to be very much in focus in 2021. Continued demand for professionals at a senior level as opposed to hiring more junior candidates and having to train and upskill them. That's going to continue in 2021 and it's going to be far easier for an employer to lead an experienced professional remotely than it is to fully train someone from the ground up. Also, the demand of the regulators and the pressure that businesses are under mean that they need to deliver things far quicker than they probably would like to. So they need someone with experience to hit the ground running so to speak.

Daniel Connors:
Looking into 2021, do you anticipate there to be a reluctance by candidates to actually enter the market?

Richard Johnson:
Yeah, absolutely. There will be a continued reticence by candidates and I think that will be particularly true for top talent or talent within those subject matter expert areas. The key to accessing these candidates will be to simply engage your trusted recruitment partners and agencies to represent your business out in the market and source the best latent professionals that are out there.

Daniel Connors:
It seems to be that a much more proactive approach is often needed, particularly for a lot of these more technical roles. I guess you mentioned, looking back at 2020, flexible working arrangements working from home etc. is this something you feel like is going to continue through 2021, or do you feel like we’ll return back to ‘normal’

Richard Johnson:
I think 2021 will see businesses take full advantage of, I guess, the financial opportunity around their real estate presence, looking at how much office space they actually need and maybe move into more remote and hot desk models, where you know most firms and businesses that I'm in contact with, they're looking at an average of 50% working week in their office and two or three days from home. Obviously managing that amongst your teams and with your managers, we're currently doing it 100% so 50% it will be manageable. I think it's going to be important certainly for companies to manage their culture and values and certainly train more junior professionals and new starters. And so there will be that flexibility, but I can't see it going back 100%

Daniel Connors:
I think the other thing to mention there is that the kick on effect it has from a morale point of view and the fact that people are working part time from home at the moment, that is something that I feel would be embraced as we as we move forward. I guess, still looking at 2021 and what you anticipate, are there any particular Accounting and Finance skill sets which you anticipate will be most in demand?

Richard Johnson:
Yeah, we're focusing particularly on Accountancy & Finance. I'm glad you brought that up, demand will remain high for professionals again with experience & any SME knowledge. Over the years candidates have gravitated more toward forward looking commercial analytical roles, naturally leaving a lack of candidates across the more technical areas of accounting and also treasury. Whilst the world of regulation has evolved significantly, neither of those technical areas have been careers of choice for the more junior professionals. But I’d say as businesses seek to best position themselves to trade through what will be an uncertain 2021, we are going to see an increased need for qualified accountants across FP&A, Financial Planning Analysis to support business leaders with their decision making, whether that be around revenue drivers or cost management. So I'd also foresee experienced Finance Business Partners and FP&A accountants being particularly high. But whatever the skill set, I'll come back to it again, whatever the skill set do remember that there will be a reticence from candidates to proactively enter the market. This will continue to put strain on areas that are already short of skills and candidates in the market, so again coming back to it, partnering with your trusted external representatives is going to be key.

Daniel Connors:
Beyond partnering is there any other advice you could give to hiring managers looking to recruit or even retain staff through 2021?

Richard Johnson:
Yeah, I would say starting with retention. I think obviously you always want to look first in-house at what talent you've got available. Per your offering to new starters, ensure your team are constantly aware & reminded of the support that is available to them, either directly by you or indirectly by the wider business. The support could be in the form of well-being training and/or longer term development. It’s really imperative that they are constantly reminded and don't assume that they just know it because they're in the team, they're in the business. The pandemic has had a number of effects on the market, but the biggest change has been working from home and it's forced the most resistant of firms into having flexible working arrangements, be it part time, working from home with varied working hours. The indication is from clients that this model will continue, as mentioned before, and so we need to ensure that we are tuned into our teams, an individual's well-being and their motivations and drivers, where you could probably feed off that in person you’ve probably got to be a bit more direct in discussing that. Obviously remunerating with staff fairly and competitively is always key, if it takes someone to hand in their notice for you to review their pay then often it’s too late. My advice is to get on the front foot and acknowledge their performance, particularly those that you feel have performed well this year and make them feel, I guess, loved and reward them appropriately to prevent them from even thinking about a move. So retention is key, and there's lots of easy things you can do that aren't necessarily financial related, first and foremost, to retain your staff. If when it comes to your recruiting then being accessible or even more accessible to your recruiters who are representing you, your role, your business, whether it be internal recruiters or external is essential. Being willing to have informal chats with prospective candidates as well is crucial, as I mentioned before, the market is full of people who are potentially going to consider a move, but don’t have a CV ready and don’t consider themselves proactive in any sense. The fact that a recruiter or your internal partners can say, look, I'm in direct contact with the hiring manager and they are willing to have an informal call with you to see if this could be something worth pursuing. For the sake of that 20 minute initial call, could be the difference between you landing your absolute ideal candidate or just getting the best of whoever is proactively looking and so that would certainly be the key piece of advice from my side.

Daniel Connors:
So again, looking forward to next year, is anything that you would anticipate around volumes, a particular area that’s going to be a focus? Salary, do you anticipate changes in salaries or rates for that matter?

Richard Johnson:
I'd say generally there's not going to be a sweeping increase in salaries for 2021, obviously some businesses have had it harder than others, so the focus is on cost, but for a limited number of candidates, particularly in those areas of specialisms whether it be Treasury or Regulatory or areas of Finance, Policy, etc. then salaries would be growing circa 5%. But I think when we look at irrespective of candidates current salaries, if we then take a shift in thinking about, okay, what if I'm hiring. Candidates salary expectations are going to significantly increase next year so throughout 2020 the trend has been companies have been coming to the market willing to offer what candidates are already getting paid in the large majority of cases, that's going to have to be addressed. You'll save a lot of time if you get all the relevant market intel up front so you can make a meaningful offer to your successful candidate, so that's a case of looking externally at benchmarking and salary trend information as opposed to benchmarking against your current teams. To compete for the top talent and to mitigate any impact of counter offers, I would say firms would need to be willing to pay anything up to, if not, at least 20% on a candidates current salary to guarantee that hire.

Daniel Connors:
From what we've seen it, it's often better to put your best offer out initially as opposed to going back and forth. From what I've seen it seems like an elongated process will generally mean the candidate won't end up moving.

Richard Johnson:
Absolutely. The impact of that first offer is huge, psychologically for the candidate that first offer is you demonstrating how much you value them and how much you want them on board. I appreciate, there's a cost battle there but stretching it will set a fantastic starting point from which that person is going to join in a very buoyant frame of mind and will get their head down and get stuck in and make that meaningful impact. For the sake of what we're probably 2/3000 pounds, in the grand scheme of things what you'll get in return will certainly make up for that.

Daniel Connors:
Thanks Rich for taking the time today, some really interesting pieces there, some insights into next year and a great review of 2020, so thanks very much for your time.

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