The top 6 Reasons why I think the Financial Services Job Market Will Push On From 202I
Feb. 03, 2021, at 06:45 PM
Of the many things I have learnt in my 20 years as a Talent Acquisition professional in financial services, it’s that trying to predict hiring activity is as hard as it gets. Let’s just say Financial Services as an industry is not known for its headcount planning abilities (and even less so its ability to stick by those plans). Even those that accurately forecast incremental hiring quickly come unstuck after bonus day, when turnover picks up and remains steady until Q4. Throw in some poor interim company results, a jittery share price and/or some macro-economic or political uncertainty and FS firms can’t wait to apply the brakes. There are many other industries that are better at playing the long game when it comes to hiring and tend not to be so reactive as FS.
However, the other thing I have learnt is that even when the newspapers are all doom gloom, reporting lay-offs and recruitment freezes, hiring still tends to carry on in some form or another. It’s really hard to run a business without any hiring at all and I don’t necessarily just mean incremental hiring that adds more cost to the bottom line. A lot of corporate recruitment is about replacing leavers or internal movers, where you have to keep recruiting just to stand still(so to speak).
Clearly from the title of my post I am an optimist when it comes to FS hiring in 2021, but what gives me reason to be so optimistic?:
1/ Pent up demand – lots of roles from last year were put on hold or cancelled altogether. It was 30- 50% down for a good portion of 2020 before picking up again in late Q3 and Q4. Lots of best laid hiring plans budgeted in 2019 for 2020 just didn’t happen and that means businesses haven’t had that annual injection of fresh talent, and I just don’t see that continuing into this year.
2/ Turnover will increase – there are a lot of people that have been sitting on their hands waiting to move but have thought better of it (see my blog article - stick or twist)
3/ Some parts of the job market have remained buoyant or have even increased - and will continue that trend going into 2021 (step forward Fintech). Whether it’s the start-ups or scale-ups – activity is rife, and they smell an opportunity to hoover up great talent from more mature financial services companies.
4/ The stock market remains strong - unlike in the last two major economic downturns in 2001 and 2009. Many commentators have already suggested that’s because economic indicators were generally healthy before a self-inflicted lockdown, and in my experience, hiring remains buoyant in FS when stock markets are resilient, even if there is a risk that government debt (and perhaps company insolvencies) will eventually take their toll on the economy overall.
5/ Almost all employers have got used to recruiting and onboarding new hires remotely – where most firms put the brakes on due to all of the uncertainty at the start of the pandemic, at least some of the slowdown was due to operational issues. Fast forward a year and recruiting and interviewing remotely has become normal in a way that would have seemed impossible in early 2020.
6/ Finally, it’s clear that there is a lot of hiring out there right now - and that’s coming off the back of a very difficult year and multiple lockdowns around the world. Momentum around hiring appears strong. So, if hiring can be this resilient with things as they are – just imagine the upturn if all of the vaccination activity provides an even greater boost to confidence.
In spite of my optimism around hiring, I also think that lay-offs and restructures will pick up too as employers get to grip with what they need from their organisation going forward in the ‘new normal’. It’s also fair to say that some sub sectors of financial services have fared better than others which all leads me to conclude that net/net, I doubt there will be many more heads in Financial Services by the end of the year, but there will be a lot more seats changing driven by an increase in liquidity in the market (to coin a banking phrase).
However, the other thing I have learnt is that even when the newspapers are all doom gloom, reporting lay-offs and recruitment freezes, hiring still tends to carry on in some form or another. It’s really hard to run a business without any hiring at all and I don’t necessarily just mean incremental hiring that adds more cost to the bottom line. A lot of corporate recruitment is about replacing leavers or internal movers, where you have to keep recruiting just to stand still(so to speak).
Clearly from the title of my post I am an optimist when it comes to FS hiring in 2021, but what gives me reason to be so optimistic?:
1/ Pent up demand – lots of roles from last year were put on hold or cancelled altogether. It was 30- 50% down for a good portion of 2020 before picking up again in late Q3 and Q4. Lots of best laid hiring plans budgeted in 2019 for 2020 just didn’t happen and that means businesses haven’t had that annual injection of fresh talent, and I just don’t see that continuing into this year.
2/ Turnover will increase – there are a lot of people that have been sitting on their hands waiting to move but have thought better of it (see my blog article - stick or twist)
3/ Some parts of the job market have remained buoyant or have even increased - and will continue that trend going into 2021 (step forward Fintech). Whether it’s the start-ups or scale-ups – activity is rife, and they smell an opportunity to hoover up great talent from more mature financial services companies.
4/ The stock market remains strong - unlike in the last two major economic downturns in 2001 and 2009. Many commentators have already suggested that’s because economic indicators were generally healthy before a self-inflicted lockdown, and in my experience, hiring remains buoyant in FS when stock markets are resilient, even if there is a risk that government debt (and perhaps company insolvencies) will eventually take their toll on the economy overall.
5/ Almost all employers have got used to recruiting and onboarding new hires remotely – where most firms put the brakes on due to all of the uncertainty at the start of the pandemic, at least some of the slowdown was due to operational issues. Fast forward a year and recruiting and interviewing remotely has become normal in a way that would have seemed impossible in early 2020.
6/ Finally, it’s clear that there is a lot of hiring out there right now - and that’s coming off the back of a very difficult year and multiple lockdowns around the world. Momentum around hiring appears strong. So, if hiring can be this resilient with things as they are – just imagine the upturn if all of the vaccination activity provides an even greater boost to confidence.
In spite of my optimism around hiring, I also think that lay-offs and restructures will pick up too as employers get to grip with what they need from their organisation going forward in the ‘new normal’. It’s also fair to say that some sub sectors of financial services have fared better than others which all leads me to conclude that net/net, I doubt there will be many more heads in Financial Services by the end of the year, but there will be a lot more seats changing driven by an increase in liquidity in the market (to coin a banking phrase).
