Finance Recruitment Market Update - a blog not as boring as this title!
Yesterday I was asked a question that I get asked all the time.
‘How’s the finance recruitment market at the minute?” (*After 20 years in the industry, if only I had £1 for every time that question had been asked! I’d be living in a beach house in Hawaii by now!)
“A melting pot of craziness!” was my response.
I’ve been through a lot of socio-economic changes in the past 20 years. But I don’t think there has ever been a dynamic like we are seeing in this job market.
So what are the factors or ingredients that are being thrown into this melting pot?
Record levels of job vacancies combined with record levels of employment
A simple supply and demand equation. There are more vacancies out there than there are people to fill them, especially in skilled professions such as accountancy. It is harder to find talented professionals and when those people do come onto the market, they invariably have multiple job prospects on the table at the same time. For employers, it means reduced shortlists and having to make quicker decisions to secure the best talent.
The hybrid/remote working revolution
This topic has been written and commented about so much over the past year or two. To summarise, job seekers want to be able to work remotely for at least part of their week (ideally 2 days or more). Employers are increasingly keen to see people back in the office. The best trade-off between these two slightly competing desires seems to be a hybrid offering. However those that are making people return to the office full-time are drastically narrowing the talent pool that they can fish in. In a recent study that iMultiply compiled (full results coming soon – watch this space!), job seekers stated that a company’s approach to hybrid working was one of the primary factors when considering their next career move.
This is one of the biggest changes in the past 12 months. As talent has become harder to find, employers have had to increase the base salary on offer to attract job seekers. Job seekers also know they are in demand and are bolder with their expectations. Counter-offers (see below) are also driving up wages. Then there is the cost of living crisis, everyone’s pocket is getting pinched and so the need for more money is increasingly pronounced. The average salary increase we have seen this year when a candidate accepts a new job is 21%! But we have seen some crazier increases too (83% recently achieved for a newly-qualified accountant) so it’s likely to take a balancing of supply & demand before this eases.
Counter-offers, a case of when, not if!
When coaching someone through handing in their notice it used to be a case of ‘IF you get a counter-offer what will you do’, now it’s ‘WHEN you get a counter-offer’! Employers know how hard it will be to replace that person and so are offering significant pay rises to stop people from leaving. Pre-pandemic, salary had dropped down the list of things people were looking for when job seeking but in our recent study, it has risen back to the top of the list of the most important factors in a new role, closely followed by hybrid/remote working.
Them vs Us
Employers and Job Seekers don’t seem to be on the same page. Employers are often not keeping pace with inflation in terms of salary increases, or indeed the expectations of their people. Job seekers then start to look externally and are looking for 15-20% salary increase (the average we have experienced in 2022 is 21% when 10% used to be the norm). Employers are getting bitten by this when they go to recruit. For example, the role they are recruiting for is £40,000 per annum. Pre-pandemic, that meant the person that might fill that role was currently on £36,000. Not a massive gap and the skills level would be reasonably close. But now, the person to fill that role is probably on £32,000 and that is a different level of skills and experience. Employers are struggling to embrace this and therefore the reality versus what they believe can happen are very different. It’s like house-hunting. You want the 4-bed detached but your budget gets you a 3-bed semi. You can look all you want at the 4-bed detached, but it ain’t going to happen.
Political and economic uncertainty
Change of leadership in Government, double digit inflation, cost of living crisis, fuel poverty, strikes in most frontline services. We have seen it all and we will continue to see it over the coming months and even years. Uncertainty makes people cautious. While we haven’t seen this from employers yet (hiring levels remain high), it is likely to be making people cautious about changing jobs. Which only adds to the supply & demand problem!
A unique melting pot and one that will be with us over the coming months and possibly longer. My personal viewpoint is that a rebalancing of the job market will happen when the number of job vacancies start to fall. If job seekers have less options then they are more likely to stay put and/or salary expectations return to a more sustainable level. When this will happen is anyone’s guess. Until then, job seekers will continue to make the most of a ‘buyers’ market and employers need to embrace the changes that are happening in order to find and secure the best talent
finding this interesting?
Why not share it with friends?
It's good to talk
Get in Touch