Annual survey reveals employment prospects for financial services sector in Scotland

More than a quarter (29%) of financial services firms in Scotland say they have been surprised by the pace of the banking revival and believe 600 new jobs will need to be created to cope with this business growth according to an annual labour market survey. However, 85% of firms are now struggling to recruit the right staff.

The annual study, celebrating its 10th anniversary this year, was conducted by Joslin Rowe Scotland, the financial services recruitment specialist and supported by Scottish Enterprise.

The 80 financial institutions, employing at least 19,300 people in Scotland, contributed to the research during November and December 2010, which was designed to gauge perceptions amongst some of the most influential employers in the sector. The majority of firms (79%) described their company’s level of business confidence for 2011 as 'optimistic' or 'very optimistic' although 21% had neutral feelings about the future. Importantly, no organisations signalled their pessimism for the year ahead (compared with 19% pre-recession).

The main findings of the Joslin Rowe Review are:

• Over a third of responding companies (39%) said their current staffing levels are too lean to manage a significant upturn in 2011
• The average median headcount rise in 2011 is predicted to be 10-15%
• Trainees emerged as the most likely level to be recruited for this year. A welcome relief to forthcoming graduates.
• However, around 100 jobs are still expected to disappear as firms, particularly within life & pensions and investment operations continue to restructure.
• 25% of responding financial services firms are now experiencing retention issues as job security fears disappear (a rise from 8% last year).
• The average salary rise in Scotland's financial services industry is forecast to be 1-2% in 2011
• Bonus payments have dropped. Directors received 10-20% in 2010 compared with 20-30% previously.

Margaret Dyer, director, Joslin Rowe Scotland believes:

"It's no surprise companies are now facing big recruitment difficulties. A new labour market force has emerged in recent years and is starting to call the shots. After Generation X and Y, the latest buzzword to hit Scottish labour markets is set to be Generation R.

"A term coined to describe those professionals who were retained during the recession, escaped redundancy, worked in far leaner teams and thus progressed faster than usual as they took on the work of more senior ex-colleagues. Filled with confidence as to their own abilities and what they can offer, Generation R has high expectations as to what their next move should be. They know they have learned a great deal during the recession and they know these skills are invaluable to companies looking to build for the future. In short Generation R employees can cherry pick the very best opportunities - on their timescale."

Jill Farrell, director, Financial Services, Scottish Enterprise says:

"The Financial Services sector is a fundamental part of our economy and its success is of key importance to Scotland's long-term future. Given the recent difficulties faced by the industry, it is very encouraging to see increased levels of optimism from those surveyed.

"However, there are still real challenges to be faced. With almost a quarter of respondents still looking to reduce their workforce, and 85% reporting recruitment difficulties, it has never been more important for the industry and stakeholders to work together to maintain and grow the pool of available talent. Scottish Enterprise and Scottish Development International will continue to work with their partners in both the private and public sector to capitalise on strategic opportunities in the sector and further develop our workforce."