The Market

We have seen the most unprecedented 12 months in the financial services industry and the real economy since the depression of the 1930's. The collapse of US housing market caused by subprime lending, the global credit crunch, the collapse of Lehman's and Merrill Lynch, the very best of our financial firms cup in hand relying on state intervention, part and full nationalisation of our biggest banks (37 billion given to RBS), quantative easing... The knock on effect of these events has been devastating across the world. A period of tougher regulation, monitoring and enforcement seems the current thinking and approach by the FSA and current labour government. Should the conservatives get into government again in May we expect regulatory control to move back to the Bank of England.

The top 100 Financial Services firms by market capitalisation have seen an increase in risk and governance expenditure up by 30% to £28 billion. These costs are still yet to peak. Predictions based on previous surveys suggest that by 2010 the cost to the top 100 FS firms in the UK could reach £50 billion.

The level of compensation and bonuses paid within the FS sector has been headline news this year. It comes as no surprise that the last bonus run has been lower than previous years due to poor performance and the economy. Going forward there is now a growing trend/ pressure to reward your people by increasing the basic salary to account for the reduction in bonus structures. The demand for risk, reg and compliance specialists is extremely high. The need to understanding your risk has never been higher so top talent will still attract a premium.

There are currently very low levels of attrition across the industry. This has been due to the unprecedented economic circumstances which have paralysed the job market since the end of 2008. In order to appear healthier, firms have been forced to relocate employees where ever possible to reduce redundancy levels.

However as we are seeing the market bounce back and optimism return good people are keen to get their careers moving again after this period of a lack of progression and opportunity which the levels of attrition, depressed job market and lack of confidence have created.

4 out of 5 major FS firms now have a CRO in place. Risk Management decisions at 70% of major institutions are now made at board level. There is more pressure than ever on the industry in terms of liquidity, capital management, monitoring, understanding risk, reporting to name a few. These factors and many more indicate the ever increasing need for top talent.