Projects & Change Management Recruitment Market Update Q1 2016

Luke Skinner 15.04.2016

The first three months of 2016 have been fairly tough in the contract market, as several of the big players within the project market have had hiring freezes, together with restructuring of the risk and finance space.

Work has come from a variety of other places though, including several opportunities at Asset Management & Custody firms. We thought this would change when the bonuses were announced, but it seems candidates are happy to stay where they are, rather than look at alternative options. This is mainly due to the fact that many were expecting poor bonuses and there are fewer opportunities to move into at the moment, especially with FRTB and MiFID II being delayed by a year. 

Continuing the pattern from the past two years, it seems even more apparent that recruitment is driven by regulations. In fact, there is a difficulty in getting positions to be signed off if they are not of a regulatory nature. This has been regulations such as BCBS239, FRTB, CCAR, FDSF, expected shortfall methodology under Basel 4 and even the production of RWA for operational risk losses and scenario analysis for operational risk. Relating to the emphasis on regulations, Data Quality is another hot topic at the moment. Candidates with a good knowledge of data from a finance perspective are very much sought after. Compliance has also been high on everyone’s agenda and there has been a demand for candidates with KYC/AML knowledge, and we expect this to continue throughout the year. Continuing the pattern from the past two years, it seems even more apparent that recruitment is driven by regulations.

There are a number of reasons for the lack of hiring and some are calling it a “perfect storm.” Financial results for 2015 were fairly poor for many of the big banking institutions and this has affected their share price. In Q2 of last year, the Banking world witnessed the exit of Antony Jenkins from the helm of Barclays after less than three years in the top position, apparently for not achieving the cost cutting objectives the board had set back in 2012, following the Libor crisis. There was a changing of the guard at Deutsche Bank and Credit Suisse around the same time, which has led to some restructuring and a new strategy at these places. The EU referendum and US presidential election this year has led to a lot of uncertainty, which in turn has affected people’s appetite to hire. The potential ‘Brexit’ has probably been the major reason for the slowdown in recruitment in general across the UK. Oil prices have also been low, which can affect inflation and means the Bank of England will keep interest rates where they are for the foreseeable future. 

Asset Managers and Custodians have so far appeared a little bit more resilient to the dragging of feet from the Major Investment banks around Brexit and the like, FTE reviews have been a hot topic and jumping through the necessary hoops for roles has proven challenging. More positively though they have continued to hire and have been a leading light on large scale global programmes in Q1. Strategic initiatives is the key phrase being used this year as banks look to consolidate and look for true long term stable ROI’s that are necessary.

We do however expect things to pick up in Q2 & Q3 this year, as there are tight regulatory timelines that need to be met. Although a couple of the big regulations have been pushed back, we believe there will be activity to hire strong Business Analysts, from around May onwards. Usually our busiest time of the year is from February to July but we are expecting it will be from around the middle of the year until November 2016. 

In addition, the banks with a retail arm are getting set for Ring Fencing and we expect to see a surge of roles to come through in this area. The managers will be keen to see people with legal entity, target operating model and cross functional project experience. These institutions understand that to attract the best candidates they will need to increase standard contract rates. Delivery for this project is 2019 so we expect to see a large amount of opportunities to come through in the next 12-24 months. We do also expect there to be a preference towards hiring permanent staff in this area due to the longevity of the initiative.

With regards to permanent hiring, most large banks either have had headcount restrictions or additional sign-offs in place for permanent recruitment, which delays the process. One bank however has embarked on a long term strategy and is looking to recruit change people at a more Associate/AVP to replace senior contractors. They feel this is one way to address the balance between temp and perm whilst producing a more stable and cost effective environment over time. Candidates are also seeing more roles from consultancies and Tier two banks, which presents an issue in filling perm roles. Quarter 2 has already began to move in a distinctly quicker pace than Quarter 1 and the expectation is that this will continue to thrive.

Hiring managers are stretched for resources, which results in a much more stringent set of requirements for each role. While a slow job market does result in more candidate supply, there are instances in which the requirements are a little too much for the level of the roles. Again, time becomes an issue here, as often a hiring manager will run through quite a few interviews before coming to this conclusion.

Rates have stayed consistent throughout the last few years, with Senior Business Analysts being paid around £550-650 per day depending on the required skill set and institution. Project Managers are receiving up to £750 per day and Programme Managers anywhere up to £1100-1200 depending on the scale of the Programme.

Overall, their is an air of positivity in Projects & Change recruitment and like anything within recruitment, it is all cyclical. Quarter 2 has already began to move in a distinctly quicker pace than Quarter 1 and the expectation is that this will continue to thrive. The next hurdle will be the result of Brexit in the summer, continuing an already bumpy 2016.

projects and change candidates falseprojects and change roles

Luke Skinner's picture
Associate Director
lskinner@morganmckinley.com

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