Banking & Financial Services
After mass hiring created an unsustainable bubble in 2022, organisations across the financial services sector are reviewing their priorities. Glenn Barton, Investigo associate director, banking and finance, highlights the latest market trends for 2024.
Here are the key areas leaders need to prepare for in 2024:
Positive outlook – an upturn in the permanent hiring market.
Retain talent – a renewed focus on career development and progression.
Workplace wellbeing – how mental health and wellbeing is reframing hybrid working.
If 2022 was the year that daily life returned to normal, 2023 was the year of reflection. Financial services organisations weighed up their position regarding hybrid working preferences, military conflict, the growing cost of living, rising interest rates, inflation, and the near sector-wide headcount growth in 2022. They took stock of their businesses, assessing cost, headcount, and project ROI. The result was an inevitable slowdown from the frantic hiring of the previous twelve months.
Demand for experienced financial services professionals in 2022 was the highest seen for many years, with contractor day rates and salaries increasing by up to 25%. Businesses were spending on projects once again with a return to BAU – and back and middle office teams grew significantly. A candidate-led market saw almost daily increases in pay rates as organisations competed for the limited available talent. This led to large, expensive, and unsustainable workforces across the sector.
It was, therefore, inevitable that 2023 would not follow the same pattern. H1 saw large-scale redundancies, high-profile acquisitions, and banks collapsing. Fintech funding was significantly impacted, and the wider technology sector continued to make layoffs. With rising interest rates and inflation, financial institutions were understandably cautious in their hiring.
Already in 2024, there is cautious optimism in the permanent hiring market. Although Q1 is expected to be quiet, bonus pools look set to be below average, which should lead to some movement in Q2. Interim spend is expected to remain steady through the start of the year as teams look to use any remaining budget before April. Substantial hiring in regulatory projects with the next iteration of Basel, DORA and EMIR Refit are all on the horizon. The hiring boom seen in 2021-22 is unlikely to be repeated. The expected outcome is a return to pre-Covid hiring levels and a normalising market in 2024.
Businesses that invested a lot in hiring in 2021 and 2022 will be looking to retain this talent through continued focus on professional development and career progression. Where prudent, businesses will choose to upskill their existing team rather than recruit in 2024. It is no longer a candidate-led market.
Firms continued to put staff mental health and wellbeing high on their agenda in 2023, and benefit packages that support this remain more important than ever. Wellbeing is recognised as a core enabler of employee engagement and organisational performance into 2024 and beyond.
However, as the market calmed down in 2023, many FS businesses took the opportunity to reduce their number of flexible working days, sometimes returning to five days a week in the office. This received a mixed reception from employees, but most accepted that a return to the office was inevitable.
Corporate ESG strategies also emerged as a key part of organisations’ agendas. Businesses will continue to review how they can grow whilst benefiting the environment and community. Consumer pressure for climate-conscious businesses
and increased climate-related regulations are driving a “green business” ethos.
The backdrop of high inflation and interest rates led to a cautious hiring environment throughout 2023. Businesses are now showing increased market confidence and a continued focus on supporting staff in a positive working environment with the inclusion of benefits packages that reflect this, demonstrating renewed optimism for an upbeat outlook for 2024.
Positive signs indicate that 2024 will see a normalising hiring market with large new regulatory projects planned. Businesses will prioritise developing careers, offering professional development and clear pathways to career progression. Wellbeing-focused benefits packages and hybrid working are easing the transition to a return to BAU with more days spent in the office.
