Summary

I don’t think anyone would disagree that 2020 was a tough year. In recruitment we are usually on the sharp end of economic turmoil, so I’m very empathetic to people’s struggles, especially those seeking new employment.   However the good news is that over the last couple of months we have seen some glimmers of hope. Since last September there has been a slow but steady incremental demand for accounting & finance talent in London. This was precipitated by the gradual reopening of offices, and clearing the hiring backlog which was created in the late spring and summer months due to the COVID restrictions and the extreme uncertainty. Candidate needs have changed Whilst firms were constrained and had conservative hiring plans, the risk appetite among candidates for a new role, company, or location change surprised us - this has no doubt been triggered by the enormous lifestyle changes that we’ve all been contending with recently. Many people have decided to escape that city in search of open, more green spaces, and the vast majority of candidates we speak with are expecting a new level of work flexibility to support their personal and family interests.A large dichotomy between company attitudes to hiring!   Some firms are making the hiring process so cumbersome that both parties lose interest half way through the process.  It’s not uncommon to see a candidate going through six or seven rounds of interviews, without receiving an offer at the end of the saga. Whilst other organisations are very quick to bridge the skills gap, recognising that finance departments need enough resources to operate effectively. The overwhelming message that we are receiving is that accountants are feeling jaded, given they are working harder than ever with less moral support and fewer resources. Now businesses are starting to see cracks appear and recruitment is back on the agenda. " It has largely been an employer’s market lately, where candidates have very realistic expectations and businesses have been able to secure strong candidates quickly. We are also seeing a fresh demand for niche skillsets, such as: Regulatory Reporting,  IFRS 17, and Technical Accounting, which has led to competing offers and a shortage of candidates with the right skills. The projects that were put on the long finger are now back in focus.In contrast to the 2008 crisis, we haven't seen many redundancies within financial services firms. Nevertheless, businesses are reassessing what skillsets they require from senior finance leaders in this uncertain environment. Unfortunately we have seen some cost cutting at the very senior end of the market with opportunistic or knee-jerk removal of CFOs and Directors who may have been seen as an expensive luxury in a stale economy, however these people will be an absolute necessity to have in place when businesses return to growth mode. We’re expecting risk appetite to accelerate Going into spring 2021 we fully expect that positive news on a vaccine will spur a newfound confidence, and risk appetite will accelerate the need for additional resources and new expertise, leading to a war on talent. Our advice would be to really look after those star employees who you want to keep as they will be approached by other companies! If you are thinking about growing your team or department, it may be worth getting ahead of the game and kicking that process into action before you lose out, or have to pay salaries over the odds.If you are considering recruitment options, or want to discuss your own personal circumstances, then please feel free to call me for a chat on 079 6337 0126, or drop me an email.

Summary

Looking forward to the end of the year, it is unfortunate to state that the Covid crisis is still a huge part of our lives, and with this comes the expanding impact on the global economy. True, a few sectors have done well under lockdown conditions but they have been the exception. It has been suggested that by the time this crisis is over, it could, through the destruction of the economy, cause much more harm to the financial system than the 2007 financial crisis, with talk of a V-shape recovery becoming muted. The future is somewhat unknown, and with no vaccine, the virus will continue to change the world we know.The financial sectorOne particular sector which has weathered the storm is banks and other financial intermediaries. They did this by being quick to react and adjust to the new business environment. An environment that requires more attention to liquidity management, conducting business over a long distance, and offering more time and support to their clients. However, the real test will come when the debt moratorium ends. Banks will need to have a clear picture of the outlook of their clients and their new risk profile. " Brexit in the backgroundThere is also no forgetting Brexit, rearing its head in the background of the pandemic. While we wait for a negotiated deal, the outlook is still concerning, as things will not be the same for most businesses moving forward. A new normal and a new kind of relationship with the EU requires a full-scale reassessment of risk. Banks and other financial intermediaries will need to upgrade their risk management systems, just like they did post the 2007 financial crisis. Like before, banks that stay ahead of the game will emerge as clear winners. Safeguarding for the futureRisk - when the ceiling has been lowered on the revenue front, it makes sense for banks to focus their attention on risk, and to put in more efforts to minimise foreseeable loss. Among other things, banks will want to recalibrate their credit risk models, taking into account the varied impact of Covid on all the economic sectors.Credit quality - financial institutions will need to reassess the credit quality of their clients after they emerge from the crisis; paying particular attention to those in sectors that had been more exposed to the fall out. New data and assumptions will have to be incorporated into the model in order to determine EBITDA, free cash flow and costs.Technology - This will, of course, play an important role in risk management. Banks will employ new technologies to help manage operational risk, credit risk as well as market risk. If the 2007 crisis is any indication of things to come, a lot of hard work will have to be put into the management of credit and operational risks, employing new technologies to monitor banking operations, review data and reconfigure risk models.Talent insightFor now and for a long time to come, talented risk managers and professionals are what banks will continually need - people with the right set of skills and experience. Unfortunately, the talent pool of risk managers has not been expanding in line with the new demand.Over the past decade as regulatory demands were on the rise, becoming increasingly more complex, no meaningful efforts were made to attract more talented people into the field of risk management. This has led to a shortage of skilled risk managers even before the emergence of the pandemic. Given the urgency of our current climate banks will not have the time to train people and will need to recruit. This is where we come in, if you're a professional within risk, please get in touch now.