New report on recruitment
Cost pressures impacting on hiring activity
Increasing regulation, more merger activity and demands to narrow the gender pay gap will put greater pressure on professional services firms to control costs, according to a new report.
Such moves will “almost inevitably” have a direct impact on hiring activity and salaries, particularly for permanent staff.
Recruitment company Core-Asset Consulting’s Salary Guide 2018 says firms this year will need to prepare for a new round of compliance tests including MIFID II, GDPR, FINREP, COREP, PRUVAL and PRIIPS, all of which will require investment in the required resources.
There are also pressures on firms for fairer pay between men and women employees.
Betsy Williamson, Core-Asset’s managing director, said: “Consolidation within the asset management industry last year, if not driven solely by costs, was certainly influenced by it.
“Mergers and acquisitions across wealth management, platforms and pensions was driven more clearly by a need to streamline operations and maximise growth with minimum spend.
“There is little doubt that whatever the sector, operating margins will continue to face pressure in 2018.”
Ms Williamson said the regulatory pressures may be good news for candidates with the requisite skills sets, but it means organisations will have to invest more in the implementation and maintenance of new regulatory frameworks.
“The associated costs and workflows will need to be carefully managed,” she said.
“Also, the introduction of gender pay gap reporting has shone a spotlight on all sectors of the economy.”
The UK government’s latest figures highlight that the most glaring disparities are in the financial services sector, alongside construction, said Ms Williamson.
“Creating true remunerative parity between men and women will come at a cost. A worthwhile cost, but a cost nonetheless.
“Whatever the driver, corporate initiatives to reduce costs will almost inevitably have a direct impact on hiring activity and salaries – particularly permanent positions.
“Temporary and contract roles will perhaps be the exception. Merger and relocation projects, regulatory change programmes and IT infrastructure upgrades may even result in an upturn for day-rate workers.
“For many professionals, however, opportunities for career advancement and significant salary hikes will be limited.”