Market Update: What’s Happening in Financial Services Recruitment Including Salaries?

As we turn the page on a new financial year and continue to deal with Covid-19’s implications on the economy, let’s take a moment to consider financial services salaries for new hires, and what they are likely to do over the next 6 months. This article discusses how the financial services sector’s outlook is impacting salaries and demand for specialist roles.

Despite record low unemployment rates, the financial services market can be its own economic micro-organism. Whilst hospitality, health and retail are dealing with massive staff shortages, financial services recruitment is bucking this trend. Demand for financial services talent was extremely strong in the first half of the year yet is now softening slightly. This may be because the period of strong growth we saw early in 2022 is now turning into a period of stabilisation.

In financial services in Sydney, there is always a shortage of highly experienced, talented people with the right skills for specialist roles. I head hunt throughout my networks and tap people on the shoulder for most roles I recruit for. Gone are the days of hundreds of applicants for every job advertised.

As a result of this slight slowdown in demand, salaries being offered have remained very similar to 2020/2021. In general, an organisation is having to entice a candidate with approximately a 10% salary increase to move jobs. Organisations are also mostly holding firm on what they are offering new starters. They have set their budgets and are not aggressively hiring like we saw earlier in the year.

The impact of current Australian inflation levels on the cost of living has meant that wages in the financial services sector have declined in real terms. Interest rates are up, and the cost of fuel and groceries is putting pressure on people from all walks of life.

Attracting Talent
When it comes to attracting talent to organisations, financial services companies are not offering sign-on bonuses or promises of above market rate year-end bonuses. What is enticing to the job seekers that I speak to on a regular basis, is the concept of stability. Stable businesses, solid financial backing and proven products that maintain consumer demand even in times of economic uncertainty.
This concept of stability is especially attractive to those who left roles in retail lending for greener pastures at Neobanks and Fintechs over the last few years. Some have been burnt slightly by the experience. The acquisition of 86400 by NAB and closures of Xinja and Volt have made some people nervous. It is much harder than it used to be to convince an experienced professional that they should risk the jump to a new player on the block.

A Period of Stabilisation
As a result of this slight recruitment slow down, I am seeing lots of restructuring going on and internal promotions. Of the lenders that I work with, their cost of funding has gone up. Many clients are hoping to do more with less. They are working on making sure they are fit for business going forward.
I have seen small increases in salaries for those that are staying in roles year after year, currently at slightly less than CPI.

Is there a Financial Trade-off for Flexibility?
My financial services clients have learned quickly over recent years the levels of workforce flexibility that works for them. They understand that they need to pay staff market rates to retain them and that many market players are also offering hybrid working arrangements. These arrangements tend to be across the board, for all teams at all levels. Of course, a sense of practicality needs to be maintained for those who need to do client facing or market facing roles who might need to be in the office more than others.

Many of my clients are still not 100% back in the office, as Covid-19 cases soar again in the Aussie winter and in many cases only 50% of teams are present on any given day. This continues to enable social distancing and to keep the productivity and work life balance gains that came with remote and work from home arrangements.

In Demand Roles
The roles I am seeing the most demand for are:
There has been so much growth in this area and banks, corporates and non-bank lenders are writing more and more business. Demand for treasury staff remains strong to enable them to look after the funding and securitisation of these deals. Rising interest rates have increased the cost of funding, and subsequently the competition for deals. Experienced treasurers with exceptionally strong networks are in high demand as they are the ones likely to access required funding levels most easily.

Collections and Client Services
I do expect to see an increase in demand for collections and customer service roles in the coming months. As our perfect storm of cost-of-living pressures continue and real wages decline in the face of interest rate hikes, the cost of petrol, food and supply chain issues, we can expect to see an increase in arrears for loans creating demand for collections staff.

HR Specialists
I am getting approached regularly to find good HR managers. This role can often be an open market, particularly in highly specialised areas like remuneration and benefits or process improvements. Those with business partnership experience and generalist recruitment skills are also sought-after.

In other areas, after several years of post-Financial Services Royal Commission demand for Risk and Compliance specialists, this has quietened down. I am seeing stable levels of demand for finance and accounting professionals.

All in all, the second half of 2022 is likely to remain a time of regrouping and stabilisation. I say this whilst adding the disclaimer that we have all learnt the future is not so easy to predict in unprecedented times! For those jobseekers who have been biding their time waiting for pandemic conditions to ease, there are some really attractive available roles in financial services for those ready to make a move. With 10% salary increases as pay off, career development opportunities and strong employee value propositions, it’s a great time for a new job.

To talk to us about career opportunities and to discover roles that are either exclusive to Oxygen Recruitment and HR or not yet on the market, then get in touch with our Sydney based team here. We can help you take the next step in your financial services career.