“Keep the champagne on ice,” was how one recruiter defined the current jobs
market. After almost two years of belt-tightening, pay freezes and, worst still,
redundancies, we entered 2010 with baited breath in the hope of recovery and a
return to economic growth.
And grow it has. But what we have been rewarded with is a kind of muted
confidence as some sectors of the economy grow while others stall. Recovery will
be slow and it’s unlikely previous patterns of post-recessionary growth can be
applied to this crisis, nor therefore to the jobs market.
The crucial message, recruiters say, is that the industry sectors that
suffered first due to their role in the global economic meltdown are now
returning to health. Sectors such as the financial services and banking (see
box) have begun to recruit in significant volumes again as they re-staff their
workforce to deal with increased business volumes. How consistent that will be
is unclear in the short term.
In the first quarter of this year confidence seeped into financial services,
raising the volume of vacancies by as much as 35%, says David Morgan, partner at
recruiters Morgan Law. This activity, however, hit a plateau in the second
quarter as the Eurozone financial risks tempered enthusiasm.
“It’s quite a muted response. We aren’t seeing the same volumes [of jobs] as
before. Because of the depth of the crisis we are all still cautious,” says Kira
Owen, director of commerce and industry at Twenty Recruitment.
While there are certainly more vacancies than last year, the number of
candidates applying has not decreased, so employers continue to be extremely
selective. “The market has shown signs of improvement since January, however, it
has been, and remains slow, tentative and frustrating for many,” adds Adrian
Summerton, director at accountancy recruiters Toner Graham.
In the UK a swifter return to health has also been somewhat stalled by the
May general election and June’s emergency Budget. Businesses wanted to
understand the full economic picture before they considered hiring for permanent
positions in any volume.
Commerce, although lagging behind, is also showing signs of increased hiring
as business picks up in some sectors. Energy (alternative energy in particular),
telecommunications, media and retail are, so far, the more robust performers,
but recruiters say over the next six months we can expect to see more vacancies
across all areas. “Commerce is still feeling the hangover due to cost cutting
and risk involved in hiring in case they get it wrong,” says Owen.
For the most part, employers are keen to recruit for technical and compliance
roles given the nature of the economic crisis. Although accountants should be
heartened by the news, recruiters warn that, for the time being, candidates will
have to be realistic about the opportunities available.
“One of the things we’re seeing are employers gravitating towards cleaner CVs
that demonstrate clear job progression over the past two to four years,” says
Nick Dunnett, director of accountancy recruitment at Roberts Walters. Newly
qualified accountants with commercial experience are particularly in demand.
As for the Big Four accountancy firms, recruiters say it’s unlikely we’ll see
any kind of large scale recruitment activity among them until much later in the
year, perhaps early next year. Indeed, ‘flexible futures’ – the four-day week
introduced by KPMG in 2009 – remains effective until September. “Typically the
Big Four are third in line in recovery terms. What we may see is firms
recruiting from rivals at the higher end,” says Owen.
Salaries have for the most part remained stable with few significant increases.
That is not to say that opportunities aren’t available, but they are few and
fiercely fought over. Still, now that activity has increased, candidates can
expect between a 5% and 10% rise when they switch jobs. But individuals may not
even have to leave their current posts to obtain a much sought after pay rise
“Companies are willing to offer better salaries to keep talent. We have seen
buy backs, which adds to this steady confidence. There’s a lot more common sense
around and a little bit of panic,” says Clive Davis, director at Robert Half UK.
However, senior finance professionals earning around £90,000 to £150,000 have
had to seriously rethink their expectations. “Current salary levels, despite the
gentle upturn still reflect this and I think this will largely remain the same
for some time to come,” says Adrian Summerton, of Toner Graham.
Despite warnings of future cuts in finance jobs in the public sector, for
now, the situation remains stable. What has changed are the skills needed.
Individuals with strong budget management skills as well as any change
management experience are in demand.
“There’s no surprise as a budget cut of 15% to 16% has been on the cards, so
they have adjusted what they are looking for. They are looking for good
communications skills to deliver tough messages to front line staff,” says David
Morgan, of Morgan Law.
While unease remains over the mid to long-term prospects for the economy, the
jobs market is certainly more active than anything we have seen since 2007. More
promising is that business is improving, although recovery will most certainly
be slow and only the best candidates can expect to gain the biggest salary
increases for now.
Mismanagement of salaries has led to a rise of 20% in counter offers for
resigning accountants to remain in post, according to WH Mark Sattin. The
average counter-offer made to departing employees was approximately 10% above
their existing salary in 2008. In 2009 that fell to just 5%.
Dave Way, managing director, says: “Companies have not been managing staff
expectations around salary rises properly and that’s led to a surge in counter
offering. This has all been driven by the salary freezes last year. Now the
market is more buoyant, accountants across the country are looking for salary
increases. Now companies are reacting to the problem, rather than handling it
“They also need to build long-term talent pipelines and engage employees
more, identifying these issues early on. They should expect staff turnover to
increase as the market heats up and start building their recruitment strategies
to suit the climate.”
Five out of 10 accountants are now being offered salary increases to stay in
their job when they resign. In London, the change has been even more pronounced
with seven out of 10 accountants being offered counter deals.
Banking on growth
The financial services sector experienced its fourth consecutive quarter of
improving profitability, though the latest CBI/PwC Financial Services Survey
shows businesses expect this to level off in the coming three months.
Concern about the impact of regulation and legislation on future business
remains high, with a large proportion of firms expecting to spend more on
compliance over the next 12 months.
A significant 38% said that volumes rose, while 29% said they fell. The
resulting balance of +9% is the most positive since September 2007, but far
weaker than expected. John Cridland, CBI deputy director-general, says: “The
modest pick-up in activity in the financial services sector in the past three
months fell short of expectations. But firms hope that activity will strengthen
over the coming quarter and are now planning to expand their staff numbers.”
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