New survey reveals employment outlook for Financial Services sector

85 respondents in Scotland's financial services sector contributed to research during November and December 2008, designed to gauge perceptions amongst some of the most influential employers in the sector.  Whilst almost half (48 per cent) described their company’s level of business confidence for 2009 as 'optimistic' or 'very optimistic', 19 per cent expressed a pessimistic outlook. There's also been a spike in the number of firms expressing neutral feelings for business prospects in 2009 - from 21 per cent in 2008 to 33 per cent this year.  Fund management respondents were most likely to feel optimistic for the year ahead, with life and pensions organisation most pessimistic.

22 per cent of firms expect to increase their permanent employee numbers in 2009 compared with last year’s figure of 55 per cent, however both results are considerably lower than the 82 per cent predicting recruitment back in 2006.

The annual study, which has run since the Millennium, was conducted by Joslin Rowe Scotland, the financial services recruitment specialist and supported by Scottish Enterprise.

Main findings

The main findings of the Joslin Rowe Review are:

• 82 per cent of organisations believe being based in Scotland is best for their business - especially at the moment
• The median rise in staff numbers is expected to be 5-10 per cent more in 2009
• Nearly one in five (19 per cent) are recruiting for a greater volume of strategic roles than in previous years
• 25 per cent of the respondents experienced difficulties in recruiting staff. Recruitment consultants were seen as the most successful method of recruitment
• However, reflecting market conditions, a third of organisations expect to make cuts of up to 5 per cent.
• Investment operations firms emerged as most likely to see a drop in headcount
• London has witnessed a 65 per cent decrease in job volumes, Scotland has fared much better with a 55 per cent drop. Offers of employment  in the London market dropped 65 per cent, compared to Scotland's 45 per cent decrease*
• The average salary rise in Scotland's financial services industry is  forecast to be 3-5 per cent in 2009 - but only just. A number of firms indicated nominal increases of just 1-2 per cent this year or no pay rises at all
• Directors' bonuses have dropped by 10 percentage points to 10-20 per cent this year, whilst managers' bonuses have also fallen to 5-10 per cent (from last year's levels of up to 20 per cent)
• Managers' salaries have also decreased by £10,000 to £40-£49,000

   

Margaret Dyer, Director, Joslin Rowe Scotland believes: “ For the first time in years there are many more applicants than jobs, yet this year's survey says that a quarter of companies are still finding it difficult to recruit staff. This points to one of the biggest problems Scotland's employers face at the moment. There's actually a huge amount of job seeker caution and a feeling of 'better the devil you know' so some of the very best niche talent, you'd normally expect to move around in the marketplace, is staying put. As these passive job seekers increase, sourcing very specific skills and abilities is becoming a real issue for firms in Scotland. It's a vicious circle. Job seekers think there are no jobs, so don't take a look at the market, in turn firms who are recruiting for niche skills can't recruit, and business aren't as equipped as they should be to combat the current economic crisis."

Paul Lewis, managing director industries, policy & research, Scottish Enterprise says: “Scotland’s financial services sector will clearly face some challenging and uncertain times over the coming year as a result of the continuing effects of the global credit crunch.  However, sub-sectors other than banking account for almost half of all employment within financial services, and opportunities remain  in some of these areas such as asset-servicing and fund management, which  the sector can capitalise on.

“Overall, the attributes which helped build Scotland’s strong-heritage in the financial services sector, such as a well developed business infrastructure, competitive cost-base and of course excellent people skills, are still in place. They will give Scotland  a strong platform from which to ensure the sector is in the best position possible for when the economy does pick up again.”

Download the Scottish Financial Services Recruitment Review 2009, (PDF 1.12Mb)