At the beginning of 2023, we were operating in a market that was reaching boiling point…
A climate of economic instability coupled with an ongoing battle for staff in our sector led to hugely inflated salaries, as firms fought to secure the scarcely available talent. While the war for talent is still a key impactor on hiring in the sector, and with questions about how to entice new people into the market still being widely asked within the industry, there are still a few things that have changed this year…
The burst of the salary bubble
In the latter months of 2023, we have begun to see a retrenchment in salaries from clients. Where the beginning of the year saw unprecedented increases in the salaries on offer, it was evident then that the steady incline of salaries being offered would have to halt at some point. Now, the mindset of firms is changing. Clients seem to have realised that they have been overpaying and, while some are still prepared to over-offer and counteroffer to keep staff on, offering huge hikes in salary is no longer feasible nor desirable for the majority.
The trend of tailored benefits
In 2023 we have seen an emerging trend of firms tailoring both their salary and benefits offering to individual hires; it seems that having a blanket approach to your offering within the sector doesn’t seem to work anymore, it’s necessary to be flexible and allow for customization. If a firm is keen to get one specific person into the business, they’ll put together a bespoke offering, but this isn’t something that they will advertise. Equally, firms will often match offers where they need to, but they won’t offer any of these heightened or extra benefits automatically. Rather than setting a precedent, firms are simply opting to be a bit nimbler in catering their offerings to the right talent; however, if an individual is unfortunate enough to come from a firm where the offering you were receiving was already below the standard, you’re unlikely to be able to leverage better benefits quite so easily.
It must be said that businesses that are offering the bare minimum of benefits are putting themselves at a serious disadvantage; not only is it detrimental to their reputation within the wider market, but it is also often resulting in successful counteroffers being accepted by candidates who are being offered a better package elsewhere. We are frequently seeing examples of this happening, and it means that firms that are stingy with their benefits offerings are losing out on talent. I would advise firms to seriously consider whether what they are offering is attractive, competitive, and reasonable: cutting corners here will only lead you to miss out in the long run.
Divergence over the Hybrid/Remote Debate
We have seen the hybrid and remote working debate play out most prominently over the last few months in particular, as more and more clients across all sectors and specialism are requesting a return to in-person office work. This has caused real complications for hiring, where so many individuals have grown accustomed to, and in some cases even built their life around, having access to flexible work patterns as a given. We are seeing independent and smaller firms in particular requesting their staff to return to the office, usually citing the reason that they want to be able to support and train individuals, especially at the mid-lower levels. But even the larger corporates are requesting in-office increasingly. So, there is somewhat of a divergence and a dissonance between client and candidate expectations: firms who require their hires to come into the office for 5 days a week will struggle significantly to hire, but candidates who require a fully remote job from day 1 are equally unrealistic.
Our key takeaways
The scarcity of available talent on the market looks set to continue into 2024 and beyond, as the difficulty to entice new individuals into the sector creates a dearth of skilled talent to recruit from. As a result, employers within the Financial Services sector need to start looking at the bigger picture when they are looking to recruit. Rather than thinking they will be able to pluck the perfect candidate off the shelf, employers should consider candidates who show potential, even if they don’t necessarily have the exact match of experience and skillset they are looking for in the first instance. Not only does this allow you to mold the individual and teach them the best practices of your business from the outset, but it also creates a pipeline of future talent for the industry as a whole. The ‘perfect candidate’ rarely exists anymore, so we would advise firms to start investing in their Learning & Development offering, so they can begin training advisors from the ground up in order to solve the shortage of skilled talent. Otherwise, the problem will only continue to be more prevalent as time goes on.