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Wednesday, 17th April 2024
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Financial services recruitment not suffering Back  
Sue Stuart looks at the effects of the economic downturn on recruitment in financial services. She spoke with several of the leading financial services recruitment companies in the annual Finance Financial Services Recruitment Survey.
The recruitment business is right in the front line of those facing the rigours of an economic downturn in Ireland. Certain sectors of the jobs’ market, such as IT and telecommunications, appear to be suffering job losses already, so Finance conducted a survey among recruitment agencies in Dublin to see what, if any, impact is being felt in the financial services sector.

In general there is bound to be some impact on financial services as companies downsize or close down, but this will be felt mostly at the retail end of the market. International financial services, particularly of the type provided in the IFSC, should continue to flourish. IFSC companies deal mostly with large corporations or investment managers which will still need the services even if their own markets are declining. In fact there could well be some which will step up their requirements as they restructure to maximise the potential of falling incomes.

Some international institutions with operations in the IFSC have been laying off staff elsewhere on the retail side of their businesses, but they need their Dublin base and there is unlikely to be much change in their IFSC structures. Companies in the IFSC are also relatively new and have been leanly constructed from the outset, working with only the number of staff they need to perform their functions. They have not had either the time or the inclination to take on staff who are additional to immediate requirements.

There are international financial services companies which may be following the company line by cutting back their recruitment, but others have new projects in hand which will require additional staff.

Recruitment agencies say it has become a tighter employment market over the past twelve months and is now employer driven. Candidates are also looking for different things. Above all they are seeking security as they know they no longer have their pick of jobs from a large pool of vacancies and cannot easily move from one company to another just to increase salaries or benefits.

According to the survey Finance conducted among Dublin’s financial services recruitment agencies the most attractive additional feature for job candidates is flexible hours. By not having to stick to a rigid nine to five regime employees are able to overcome the rigours of travelling in the rush hour and can adjust starting and finishing times to suit their domestic arrangements. This provides employers with staff who are less stressed and therefore more able to maximise working potential.

Nicola Flavin, of the banking division of BrightWater Selection, said, ‘I would see flexible working hours as a major inducement for employees in the coming year. This can be attributed to factors such as commuting, traffic congestion, two parent working families and an increased emphasis on health and fitness which mean that employees are increasingly grateful for a more flexible approach to the working day.’

‘Once core hours are respected, employers normally find the arrangement works well in that staff are more applied in their chosen hours.’

Helen Roberts, managing director of Centre Point Group, also sees provision of flexible working hours as important. She said, ‘This is a very important incentive and is even more apparent at higher levels. Flexible working hours are increasingly becoming available within the work place particularly in the finance business as financial services trade typically long hours. Maybe this also has something to do with the fact that it is impossible to drive into the city centre, it is very difficult and unpleasant.’

The survey showed that while sign on bonuses are decreasing as a feature, a flexible package of benefits which allows an employee to choose which benefits they want is becoming far more popular. These benefits may include healthcare, pensions, paid-for holidays, subsidised accommodation or other features.

Wendy Chin, of CPL Careers Register, said that benefits offered in financial services tend to still be traditional in nature , but industry offers flexible benefits packages which she sees as an attractive retention tool. ‘With flexible benefits a certain amount is set for the benefits and the employee decides how that will be spent. This is a very attractive option as it allows the employees to decide what they need.’

Ursula Hannon, of TMP Worldwide, also feels the main benefits are standard. ‘There are packages from junior to senior management which include a basic salary plus a bonus plus healthcare and pension. These are the most common features but the package may include features such as a travel allowance or car parking and some will have flexible working hours. If anything job candidates have become a little less demanding over the past year. As long as their personal requirements are met they are looking at whether the work offers career promotion and security of tenure.’

This is echoed by Mark O’Donnell of KPMG’s QPeople. He sees candidates now refocusing on career progression, particularly those in their 20s to 30s, and not being so demanding on other issues. ‘The sign on bonus tends to come at senior level, but it is not as prevalent as it used to be. With the economic downturn people are now looking for security and long term prospects rather than short term gain.’

‘Flexible benefits are being offered and the housing issue has become very important in the last six months. Some companies now include housing services in their human resources departments. More senior staff may be offered subsidised accommodation while junior staff may have accommodation found for them to save them the aggravation of searching.’

Bronagh McDonald, of The Recruitment Business, said, ‘For an increasing number of people anything that offers lifestyle choices is attractive and flexible hours is the most usual one. Flexible packages where the employee determines where the pounds will be spent on his or her behalf are increasing.’

‘However we believe we will see more innovation in this area. It should probably be noted that the higher PRSI costs to companies will drive some of this innovation. For example some companies are increasing their holiday entitlement which results in an attractive benefit to the employee and no PRSI costs to the employer.’

The market in 1999 and 2000 was very much candidate driven with companies offering excellent incentives to attract high calibre candidates, said Anne Keys, a director of The IFSC Panel. But she feels the market has become more balanced over the last six months. ‘Companies now have a better choice of candidate and we are increasingly seeing a move back to the standard benefit package. Sign on bonuses are not as common as they were one to two years ago but companies are willing to look at candidates who want to work flexible working hours.’

Average salary increases over the past year were around ten percent, according to the survey. But agencies believe this will be lower over the coming year and anticipate an average increase of 7.7 per cent.

Eyleen de Brun, senior consultant with DBS Executive Search, said the increases vary with different levels of staff. ‘At entry level fund accountants last year had a salary increase of 5 - 6.5 percent while management level increases were approximately 7.3 - 10 percent. But as the market has slowed down somewhat this year I predict the same increases for junior positions but a fair indicator for management level would be around 3 - 5 percent.’

Helen Morris of Joslin Rowe is not expecting any great changes. ‘ In the past 12 months we have not found any significant changes in salary increases when compared to previous years. We would estimate they have been approximately 6 - 7 percent increases. And we are not expecting any dramatic changes in salaries for the forthcoming year. Due to a recent slow down in the markets and a reduction in new jobs becoming available, competition within candidates is increasing. We may see a shift in focus from the market being candidate driven to employer driven.’

However Jane Creaner-Glen, manager of Morgan McKinley, puts the increases higher. ‘Financial services salaries have increased roughly by 12 - 15 percent in the past year, with higher increases at junior level. But I would envisage a more conservative increase over the coming year, probably closer to 10 - 12 percent.’

Participants in the survey were asked which factors they feel are the most important in improving the attractiveness of Ireland for workers from abroad. The basic salary came out top of the poll, but the cost of living and the top marginal income tax rate were also felt to be important. Helen O’Reilly of PPG Financial Recruitment very definitely placed the cost of living at the top of the list. ‘There has been a lot of press about the rise in salaries etc., and we are not seeing this at all. I do not believe that salaries have increased in line with the cost of living.’

Other relevant factors that the agencies mentioned include corporate culture, house prices, availability of affordable accommodation and transportation.

The survey also examined which media are expected to grow in popularity for recruitment advertising. The Internet came out the clear winner, both use of own website and other websites, with newspapers not nearly as popular. Honor Bleakley of SkillsGroup International said, ‘The Internet is obviously the clear winner when it comes to recruiting. Websites are becoming more and more user friendly and are adding value in terms of providing company profiles, salary guides and guidance on CV preparation and presentation.’

Linda Sweeney of Onyx Recruitment agrees and said, ‘A growing percentage of the population has internet access at work and/or at home. This is an easy way for people to browse the jobs’ market in their own time and at their own pace. There has been a huge increase in e-mail traffic for us in the past two years and this is still growing.’

However Flavin of BrightWater was not sure this is necessarily providing best value. She said, ‘Use of the company and general recruitment websites is commonly viewed by employers as a cheaper means of procuring candidates. While it may be cheaper, it is not necessarily the case that it is better value with employers finding themselves left with the screening process of numerous cvs. A recruitment consultant’s shortlist of three candidates will normally be the result of up to ten e-mails and ten interviews.’

Morris of Joslin Rowe was also slightly cautious about the Internet. ‘The Internet is widely accepted as a valuable support tool in the search for the right people and for candidates and its primary advantage is undoubtedly ease of access. While this looks set to continue the danger is in not knowing where your cv will end up. While the benefits are recognisable they cannot possibly offer the added value and personal service that recruitment consultancies provide through expertise and training.’

The survey asked if it makes sense to hire staff when the markets are cautious and responses varied. Jim Kirwan, managing director of ICO Recruitment, said, ‘It may make sense if you have a clear strategy and can afford to carry the extra overhead. While it may suit some larger organisations it is not really practical for smaller ones.’

Keys of the IFSC Panel is in favour of this as a strategy. She said, ‘Companies should hire quality staff who add value to their organisation irrespective of market conditions.’ Creaner-Glen of Morgan McKinley agrees, ‘In what has been for the last few years a very candidate driven market it makes sense to hire when the people are less confident, because their expectations are lower. However that needs to be balanced against the realistic needs of the business.’

Survey participants generally seem to feel the financial services industry could benefit from the current softness in employment in the IT/telco sectors. Suggestions of how to do this include recruiting from the finance/administration side of these businesses or employing people in in-house IT departments. It is suggested that because of the softening of this sector there is an increase in the supply of candidates, including accountants, lawyers and business analysts as well as IT people.

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