Recruitment update for project and change management professionals in London, with lessons from 2020 so far.
Overview of project and change management recruitment
Recruitment volumes within the financial services sector saw a steep drop from the beginning of the first national lockdown in March, until the end of the summer. Thankfully things have certainly improved since then, with a marked increase in the number of contract roles available to job seekers. We do, however, have a little way to go before we reach pre-COVID numbers across both the permanent and temporary markets.
There are a variety of explanations for the initial sharp reduction we witnessed, with some firms seeing an immediate negative impact on revenues and suspended hiring as a result. Other companies were not necessarily affected but decided to take an immediately cautious longer term view by trying to future proof their business. As with other downturns in previous years, we saw contracts not being renewed resulting in the remaining employees taking on more workload. In some companies though, the desire to hire remained intact but the hiring and onboarding processes were not ready for wholescale home-working and needed time to adapt. In some cases more practical problems intervened with resources being diverted into COVID related projects, or COVID related workload, and as a result hiring was suspended.
Many non-mandatory change and transformation projects have been on hold or scaled back. Even for more urgent or critical projects, hiring was challenging early in the pandemic because firms were hesitant to hire without a face-to-face meeting. Hiring managers were reluctant to take on someone without seeing first-hand the skills they would need to be successful in the role. However, now they are considering their next moves with the benefit of having been part of an involuntary pilot scheme which has enabled them to look through a different lens, with many previous business assumptions set aside.
Since the first lockdown, we have seen a number of our clients push ahead with their hiring plans as they have managed to master remote onboarding solutions. The fear of hiring someone without meeting them in person has been alleviated as we have all adjusted to working in a digital world.
Within Regulatory and Risk Change, we are seeing roles within Business Analysis for Market Risk and specifically FRTB, relating to standardised approach and IMA. We are also seeing hiring within Stress Testing and IBOR, though not as much as we expected to see at the beginning of the year (for obvious reasons).
Market rates have also decreased and this is due to two reasons; IR35 and a lack of opportunities. Over 90% of change professionals have traditionally worked via ltd companies which has meant that Banks have not had to pay employers costs (NI etc). They now have to factor this into their budgets for PAYE and Umbrella contractors and in many cases it’s the pay rate that has taken the hit. The lack of hiring has meant that demand for roles has been high and therefore many contractors have been willing to take lower rates which has also contributed to lower market rates.
Some of our financial services clients moved to a phased return to the workplace over the summer and in September with an emphasis being placed on ‘teams’ alternating between work from home/working in the office. One top US Investment Bank managed to get 50% of its employees back to the office in September. This promptly changed following the introduction of the government’s tiered system and subsequent second national lockdown. However, several London-based clients have given their employees the option of coming to work, whereas others have continued to encourage their employees to work from home unless absolutely necessary (i.e. front office/IT).
Across the buy-side, we saw a steep decline in roles across projects and change throughout quarter two and into quarter three. As in the banking world, some firms took the step of reducing costs as quickly as possible, and projects were one of the first areas to be trimmed down. This is unless they were deemed absolutely necessary to the continuity of business operations.
Since the easing of the first lockdown restrictions, activity across Asset Management slowly increased, with more companies initially opening their offices and offering employees a flexible working arrangement. Some of the major projects have continued, including large fund migrations, global front office system implementations and regulatory programmes with strict deadlines to be hit, offering an increasingly positive view to the wider market. For example, a couple of firms have ramped up their permanent hiring over the last few months to bring Business Analysts on board for data management, system and process change initiatives.
Similar to the big financial services companies, recruitment into the smaller, fully digital fintechs/challenger banks/start-ups, also took a dive in Q2. Business change roles took a back seat, while product management positions became more prominent. For example, a large fintech firm continued to hire product managers in May and June, for a new payments platform they were building. These roles were released pre-COVID, and required a couple of extra layers of sign off, but the new employees were onboarded fairly quickly once they were approved.
Project recruitment within commerce and industry has followed the same pattern as financial services, with exception to some of the big online retailers. These companies will have put immediate investment into huge transformative change programmes in order to cope with and capitalise on increased demand, as more people shopped online from their devices.
Other companies, where possible, have focused on conserving cash by reducing non-essential expenses. Where projects have been systemic to the organisation, it has led to the reduction of headcount in order to keep things moving forward with the hope that, when things improve, they will be able to rehire. In some cases, it has led to projects being placed on hold and, in the more extreme cases, it has led to the cancelling of the project completely. However, as with financial services, the easing of lockdown over the summer led to a marked improvement on job flow and we hope this continues into 2021.
As we move through the final months of the year, we do expect things to slow down a little as we get to the Christmas period. This happens every year, as firms do their budgets for the next twelve months and close off any hiring that is in place. We still expect some companies to continue to hire for regulatory projects over the next four weeks and others will want to use up their remaining budget of the year to get people onboarded. There could be a surge in hiring in January like we saw after the General Election results, but this is not expected until the second half of 2021.
A look to the future...
Whilst the pandemic is still very much with us, we are starting to see a shift in organisations moving from fight or flight mode into one of reflection. It is important to remain optimistic about what’s in store for 2021 and beyond. In the last few weeks we’ve seen the result of the US election, which will hopefully bring some stability to world order. The news of an efficacious vaccine from Pfizer which has led to a surge in the stock markets, giving hope to people that things will slowly go back to normal in the near future. We are also seeing sustainability become more mainstream than ever before, with Blackrock’s CEO Larry Fink urging the US to follow the UK’s recent move to make the reporting of corporate risk related to climate change mandatory.
Now that the COVID dust has settled, companies recognise that they will not exit the pandemic the way they entered it and are likely to possess a much greater understanding of what technology can achieve. We are seeing organisations gradually moving from a ‘crisis management’ position to refining their longer-term COVID-proof strategy. The impact of the pandemic and the realities of conducting business during lockdowns has, without doubt, highlighted the dangers of analogue thinking. We should ultimately see an acceleration of business transformation and, over the longer term, this will help to drive an increase in the volume and scope of new digital transformation projects. It’s highly likely that trends around the future of work will centre on the acceleration of digital projects and transformation thanks to being able to work anywhere at any time and business continuity plans will no doubt continue to evolve.
What have companies in the industry learnt from the pandemic?
- Employees are able to work effectively from home, especially ones that work across different time zones, as they can manage their day more efficiently.
- Technology enabled the transition to home working a lot smoother than it would have done 10 years ago and has helped employees to stay engaged with real human interaction.
- Firms are now able to onboard candidates remotely without the need for a face-to-face meeting. Laptops are often couriered out to the candidates home before they start.
- Meetings can sometimes be for the sake of a meeting, with most things being resolved through a call or email.
- Employees like the flexibility of working from home as it means they can fit their workload around their day. They do, however, feel it is sometimes difficult to switch off, as you aren’t distinguishing between your work and home life as much as before. A mix of both remote working and being in the office seems to be the favoured solution moving forward.