Following my return from furlough to the Reward and Analytics Financial Services market I was keen to put something out summarising some general themes on what I have been hearing, seeing and what my network has been feeling.
A good place to start would be the published headlines that jumped out to me whilst I was out:
- The Economy – obvious, right? Beyond the impact of Covid-19, the UK financial market has taken somewhat of a battering this year. If it’s not oil crises in the Gulf, it’s the money laundering scandal causing the lowest share prices of the investment banks in 25 years – and that’s before we’ve even mentioned the pandemic (dare I even think about the B-word…!?). However, despite the doom and gloom, the analysts and stress testers remain somewhat positive. Continued reference to the 2008 crash is not just in the news and analyses but also has appeared in conversations with my network. Although the ultimate comparison will not be made for years to come, my professional communities outlook seems positive when comparing the events and mood to that of 12 years ago. A conversation that is far from over.
- Biden/Trump Election – We’re told its rude to stare, but I just can’t take my eyes off what is going across the pond. If 2020 has taught us anything, it is that anything can happen and I for one can see this sentiment carrying us through the upcoming events on 3rd November, all the way to the end of the year.
- Hiring trends in the city – Morgan McKinley reported a 42% decrease in City hiring in Q1 of 2020 compared with that of 2019. Across our Financial Services practice in Oakleaf we saw a sharp decline in hiring particularly in May of this year and have seen an overall steady increase in demand since then.
Now turning to focus on the reward market,
- Executive Pay – Straight out of the gate, we saw the PRA make definitive moves with the largest banks to prevent dividend payments in April of this year. A logical move, and one that on top of market volatility and uncertain employee futures, contributed to the feeling that this year would be one of increased scrutiny for exec comp teams more than others. As we approach the kick-off of the year end cycle the phrase from the regulator sticking in my head is the request that firms ‘consider the appropriateness’ in regard to variable payments this year. I look forward to hearing more from the market specialists on how they are responding to this warning and how this is being received by their businesses.
- Pay review 2020/21 – Reflecting on last year’s pay review, the mood in 2019 was one of hesitancy (waiting for Brexit announcements), with the phrase ‘bonus pools are down’ being heard all too often. This year, firms are staring down the barrel of tough budgets and a population in want of some good news that may not come. We have been debating as a team on a number of themes including the lack of interim support compensation teams will have this year due to continued hesitancy to hire, the heightened risk of employee burn out this pay round and the value of the ‘at least you have a job’ argument we have heard so much of recently. All themes which I am keen to continue debating and discussing – stay tuned for a more in-depth look at some of them.
- Growth of smaller firms, particular attention to VC – the massive investment in tech that we have witnessed this year has shifted our attention to Venture Capital. Often in these businesses we see small HR functions (if any dedicated headcount at all) but with a sharp focus on fostering their talent and compensating competitively. Although often a challenge, it is always rewarding assisting firms in their search for the right carry and co-investment specialist.
- Employee Wellbeing and Benefits – I am sure many of you have watched LinkedIn flood with articles detailing creative and simple ways to take care of your teams and your own wellbeing in the past few months. A few of my favourites were D.E Shaw putting all their yoga classes online to keep their colleagues as flexible as their working from home policy, and Quilter’s leadership showing the business how it’s done as their CEO led a virtual cycle challenge, covering the equivalent distance to cycling to New Zealand! Beyond the softer parts of wellbeing, I was pleased to return and continue to hear that the trend of financial wellbeing on the employer agenda seems firmly here to stay. Broadly speaking, many of the teams we have caught up with have made anecdotal reports of a feeling that employees are engaging more with benefits across the board – the demand for cycle to work schemes illustrating this perfectly.
A fortnight back into the Reward market, I am feeling encouraged by the conversations with my network and have loved hearing about their activities over the summer. From a hiring perspective, I am hearing a real appetite for movement in the mid-senior level market. During this time of reflection we have all experienced, many seem to have reached the conclusion that they’re ready to move on and step up. I look forward to the developments and changes coming over the next few months and remain patiently hopeful the ‘interesting opportunities’ I so often mention to my candidates will come sooner than we think.
I would welcome any comments or contributions to anything I have mentioned here – please do connect and reach out. If you have any hiring requirements or a looking to have a conversation in reference to your own job search, please do reach out at bethsadler@oakleafpartnership.com