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1. Q1 2015 has been relatively busy with contract hiring dominant. However, apart from Goldmans and HSBCs regulatory surge programmes, there havent been many large-scale initiatives, with hiring spread across a number of business functions and projects. Key demand remains at the Developer level but we are starting to see a strong flow of Business Analyst roles as more change projects are signed off. Towards the end of Q1 we did see an uptick in candidate supply. Many bonuses were paid, but on the whole these were down or flat on last year. The general feeling from permanent technical staff is that a move would need to lock in a strong base increase to offset poor bonuses. The alternative is a move into contracting with daily rates at a premium, but offset by the lack of security. Were seeing demand in strategic growth areas: digital banking, payments, data provisioning and FX. There are also a number of strategic re-engineering and re- platforming infrastructure initiatives in the pipeline with many of these linked to changes in outsourcing, off/near-shoring and vendor models. Political risk, Brexit, Grexit and more regulation. With firms starting to foster longer terms plans we are beginning to see some consistent levels of demand rather than peaks and troughs. Continued recovery this year will see attrition rates increase and more demand for replacement staff. In the UK the general election has caused some uncertainty, along with potential Grexit and Brexit risks. The regulatory spectre continues to influence, with MiFID II, BRR and cyber security the key obstacles, although the general feeling is that conditions will continue to improve for the financial markets. Q1 results have, in fact, started to reflect that, with Goldman, Morgan Stanley and Citi amongst others outstripping analysts predictions. Permanent hiring set to increase in H2. The sub 800pd contract market is buoyant, and the 800-1,500 market is showing signs of increased activity as management consultancies roll off to be replaced by contract Programme Managers. The market is gaining momentum but there is a backdrop of reducing the run rate across many IT divisions. So hiring contractors with specific skills for a particular programme or project begins to make sense as a strategic, flexible resourcing option. Whilst it is often more expensive than hiring a permanent member of staff, that gap is reducing as base salaries rise. Plus, in terms of skill-set availability, notice period, and the internal sign- off process its much quicker to get a contractor on board. We therefore expect to see the contract/interim market grow, but it will be focused on change programmes and specific skill-sets. Contract lengths will be reduced, rather than used as an alternative to a permanent hire. Speed read Contract continues to outstrip permanent hires Permanent hiring volumes to accelerate in H2 Caution around Brexit and Grexit, but demand becoming more consistent The prospects for the Fintech market The focus for bonus pools Digital agenda remains key for retail banks Payments-revolution driving projects and hiring in corporate banking space Quarterlymarket update Spring 2. Fintech collaboration. Most of the top-tier banks are now adopting, investing in or partnering with the Fintech community, through various accelerators and ecosystems. Growth of the London Fintech market continues unabated. Nearly half of the 2015 FinTech50 by FinTech City are London-based. The last six months has also seen a number of high-profile funding rounds including Transferwise, Funding Circle and MCADO. Santander and HSBC have both launched $100m and $200m Fintech funds respectively and Barclays continues to support the sector through its Techstars initiative. Working with some of these firms we expect to see a clear fragmentation between those who are able to commercialise their service/product. Those that dont will remain niche or disappear. While they often have strong technologists on the board, many fail to hire dedicated sales people or product management experts to drive the marketing effort and create revenue flows. Fragmenting software market. The software market appears to be fragmenting rapidly with less interest in the large-scale, often disparate, offerings from the traditional vendors and more interest in lightweight tools. The security perceptions of cloud computing are also changing. This is allowing the banks to outsource major chunks of infrastructure and thus create significant savings through head- count reduction. Hot topics include blockchain technologies, cryptocurrencies and cyber security. Salary vs bonus. CRD IV and bonus restrictions continue to drive up basic salaries with bonuses becoming a smaller element of total compensation. Weve seen the re-emergence of structured benefits packages or flex funds, allowing more cash alternatives to be taken in addition to base salaries. Bonuses for the 2014 performance year were generally below expectations, certainly within the non-revenue generating functions. Again, bonus pools were focused at key code staff, with many firms operating forced ranking structures. Base salaries for existing staff are often below new staff who have realigned their total compensation splits. In a more buoyant market this would very likely be a problem for retention. We are also coming up against some issues where base salary increases are heavily scrutinized by HR. Some firms have already imposed formal and informal salary increase caps, at 1015% of salary. Weve noticed some flexibility here in key areas or strategic projects. The return of head-hunting. The current resourcing model is much more pro-active with candidates being head-hunted. This has an implication for salary expectations, with candidates demanding larger increases than if they were actively seeking a move. It is also worth noting that counter- offers are also more likely to be successful when candidates are head-hunted. As the war for the top talent continues, competition will intensify. Key trends in Q1: Roles Java, Python and Scala developers SME BAs (reg, risk, trade capture) Data analysts Change PMs Dev tools Java Scala Python C# with WPF Angular JS Vendor tools ION Qlikview Tibco Spotfire GMI Hadoop Splunk Business functions Compliance/regulation Risk FX trading / eFX Dev ops Digital banking Spring 3. Thomson Keene is a Technology and Change recruitment firm. We partner with a range of firms across the financial markets, from Global Banks to Fintech start-ups. Please contact Andrew Keene to discuss working together. Andrew Keene akeene@thomsonkeene.com 020 3434 1212 London 12 Appold Street EC2A 2AW New York 535 Fifth Avenue 4th Floor NY10017 www.thomsonkeene.com


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