Date Posted: 08/12/2020
We never imagined back in early 2020 that our third market update of the year would yet again be one dominated by the effects of the ongoing Covid situation. However, we are pleased to report that finally there does seem to be light at the end of the tunnel on the demand side with considerably brighter times in prospect for the sector in 2021. This update will attempt to provide a high-level overview of trends we have seen over the year and our expectations for Q1 2021.
Key market headlines
•The Tier One banks, previously very quiet, are now moving forward with external hiring, with 2021 budgets secured, volumes are getting back to c.50–60% of pre-Covid levels.
•There would seem to be a correlation between those houses not hiring externally and those having announced significant cost cutting / redundancy measures pre-Covid.
•Internal mobility has been a priority for many institutions, particularly those without a long-term objective of headcount reduction and a commitment to minimising redundancies during the pandemic. This has also suppressed external hiring in these institutions.
•Many SMEs / Mid-Tier banks remain active in the market, reflecting an absence of practical hurdles to hiring, and some strong revenues in their key business areas.
•Specialist trading shops, hedge funds and Fintechs have been the most active, +75% of all hires made since March.
•In particular well-funded specialist Fintech firms have been able to secure strong talent in a less competitive market, challenge will be keeping staff once salary differentials and demand from the big houses increases.
Unsurprisingly, given the second Covid wave, there appears to be little change to the remote working policies of most institutions with some clients committed to long-term flexible / part-time home working. Q2 being targeted as the earliest possible return date by some firms and some already telling staff not to expect to return to office-working in 2021. As referred to in previous updates, this will possibly have profound effects on available talent-pools in the UK and render “location strategies” largely irrelevant.
Digital only hiring
We have talked about this since March, whilst the SME market was quicker to adopt new on-boarding and HR processes to allow hiring to continue, even the largest organisations have now fully embraced and embedded a digital only interview and onboarding process. We live in strange times where many employees haven’t ever met their colleagues or visited the office.
Contracting and IR35
Given some of the above constraints to permanent hiring, there is a moderately disproportionately high contractor-demand. Most banks are not allowing PSCs and we are just beginning to see a market correction in contractor rates (5–10%+ increases) for those most in-demand profiles. With PSC engagement expected to be largely universally shelved across the street in March, allied with the expected increase in demand, we would expect to see rate increases of 10–20% within those in- demand skill sets. This will become established over at least the medium term. Contractors have looked to maximize their rate knowing the conversion to PAYE looms if going into a PSC engagement. There is also some traction on social media around ensuring companies pay “their share of tax”, with an emphasis on employers National Insurance, so one to watch for clients “converting” PSCs to PAYE.
Those banks which had announced redundancy programmes were quick to ensure they applied a firing freeze, but this obviously just delays execution until 2021. Albeit most of these programmes are outside tech and seem to focus on branches and infrastructure within retail and commercial divisions rather than Markets Tech.
What’s in demand?
Strong financial performance in some business lines, particularly Markets, have been borne-out in better quarterly numbers and these are chiefly in those areas highlighted in our last report (at those clients/business lines where profit is closely linked to increased flow or volatility (Equity execution, Hedge Funds, Commodities and Fixed Income)). E.g. UBS recently reported their best Q3 in a decade. The larger, full-service banks with significant retail and commercial divisions have had to make significant bad credit provisions for Covid.
More specifically we have seen demand in:
•Front office FIC / etrading.
•Commodities, chiefly driven by some of the later deadlines for regulatory obligations to be fulfilled.
•Equity Execution / Algo.
•Digitalisation – client Digital experience being more important than ever.
•Liquidity / Collateral (again Reg Driven – UMR etc).
For what roles?
•Software Engineers / Developers, across the usual Java, Python, C++ landscape, working in highly Agile environments (to which almost all firms are now totally committed and structured accordingly). This is where the bulk of demand is and will remain as clients look to direct improved profits to improve system performance and improve capabilities to clients.
•Cloud, DevOps specialists. Again, large scale commitment in this direction.
•Some Business Analysts! (Front office product facing and Reg programmes referred to above).
•Quants / Quant Devs.
•Connectivity / FIX Support Analysts.
The demand for Project and Programme Managers in the Tech or Business Change space remains very suppressed.
Employee Experience (EX)
With a huge amount written about mental health and wellbeing it is good to see authentic responses from several banks. Those that have been flexible and made life easier for employees through this period have earned some loyalty and employee “stickiness” which will result in the ability to retain more staff. The emergence of Chief Wellbeing Officers is embryonic but perhaps necessary within technology (rather than HR). We have found that many of our clients and candidates have been working even longer hours than pre-Covid, and whilst most experienced no productivity drop initially (some even reported increases), we are perhaps starting to see more of the negatives of remote working emerging. Many senior contacts have expressed concern that the lack of more informal “water cooler” moments are impacting relations between business and IT, across different IT functions and general team cohesion.
Whilst the supply side may well appear strong for hiring, we have found candidates being much more cautious and unpredictable, perhaps understandably. We are still witnessing multiple offers for those very niche engineering skill sets with more counter offers, and last-minute extensions for contractors. Those in work or latent candidates are less engaged with headhunted approaches, but we see this changing into 2021 as the uncertainty in the market abates. We therefore must work even more closely with clients to ensure we are engaging talent more deeply through the hiring process and offers are competitive.
Predictions for 2021
•Unfortunately, sooner or later, we expect some significant rounds of redundancies in those organisations committed to this pre-Covid and also in those areas/functions negatively impacted.
•A number of Tier One banks have already indicated significant increases in hiring slated for Q1.
•A rebalancing of the Perm:Contract hiring ratio (also as a result of the IR35 changes if they go ahead in April 2021).
•Significant competition for engineering talent across banking, fintech and other sectors.
•Reflection and reorganisation a key theme across the street, with changes in key leadership and strategy likely at several firms.
•Decreased bonuses in many areas, with revenue generators / key talent being a priority.
•An overall significant uptick in external hiring volumes, perhaps at, or above, pre-Covid levels, with greater flexibility around UK location.
•Potential hiring for hard-Brexit scenario.
In summary, whilst the marketplace has been hit hard by the pandemic this year, this is not a downturn caused by, or causing, a systemic problem or failure within the sector, such as those we have seen before and, as such, and on the back of some strong results, we look forward to a considerably brighter and busier 2021.
Date Posted: 18/08/2020
We hope this email finds you and your families well, and beginning to enjoy some additional freedoms. As we ease out of lockdown and into a different phase of the pandemic we want to keep you up to date with how the market is responding.
So whilst there is optimism around some, potentially quite strong business-driven demand, this is tempered by other exposures and broader corporate/macro issues, resulting in a mixed picture across the market.
Thomson Keene works with a mix of SME and global corporate clients providing a bespoke, high quality recruitment solution across permanent and contract technology hires. We are keen to engage with old contacts as well as forging new relationships at this time of change. Please get in touch with us for any help and advise, whether a candidate or a prospective client. Stay safe.
Date Posted: 13/07/2020 01/01/2022
We hope that all those in the Thomson Keene network are remaining physically and mentally well, as we all begin to lose count of which week of lockdown we are soon to tick off.
As everyone adapts to the lockdown market and adjusts working practices accordingly, the roadmap to a return to normal, or whatever normal will look like, remains unclear. We all hope that the coming few weeks will offer some clarity, and we can begin to glimpse what the rest of 2020 will look like out there.
Date Posted: 30/03/2020
Dear clients and candidates,
Firstly, I wish you all, your families and colleagues well at this challenging time.
At Thomson Keene, we are now at the end of our 2nd week working remotely. We have (relatively!) seamlessly transitioned to home working thanks to cloud-based applications and extensive use of Zoom. Although we are not working together in the office our collaboration, client delivery and candidate care has not been diminished.
Many of our clients are still actively hiring, using various video tools to conduct interviews and technical assessments. We have already seen offers made with no face to face meetings, with many clients adapting their onboarding processes accordingly. Our Human Resources and RPO partners are finding swift and innovative solutions.
Even with the welcomed respite of the delay to IR35 reforms, the coming weeks will see unprecedented and very challenging circumstances requiring us all to work even more closely as a team and support our network. We remain ready to help and able to deliver short term remote working contractors to plug any gaps should this be necessary.
Please call us if you would like a general chat or more info.
Andrew, Dan and team TK
Date Posted: 10/12/2019
Our latest Market Update highlights the key themes for 2019 and a few predictions for 2020.
please click the link below
And of course, if you'd like to chat to one of team about any topics in more detail, please get in touch - firstname.lastname@example.org
Date Posted: 22/05/2019
Gender Pay Gap Update
It has been over a year since gender pay gap reporting became law and it has become one of the biggest business stories of the year. Our banking clients are hitting the headlines as one of the most unbalanced sectors.
The reports have shown that there are less than 10% women in higher paid jobs, women’s bonuses can be one-third lower, and overall men are paid on average 20% more than women.
Date Posted: 15/08/2017
Thomson Keene is pleased to announce its new partnership with Lancelot, a Luxembourg based IT Recruitment consultancy. Exchanges between the two structures will allow better support to clients by extending their respective talent pools, as well as facilitating international development.
Thomson Keene, which is already active in the recruitment of top technology talent from London, New York and Paris, will therefore further their international development into mainland Europe.
This will provide a new dimension to TK’s service to both clients and candidates in the fast changing international economic and political context, including uncertainties around Brexit.
2017 has seen significant changes in the dynamics behind the hiring picture in London. At the forefront is an improvement in profits and business optimism for many of the key (particularly US) players. This has led to some long-overdue, serious commitment to strategic technology investment, and an increase in urgency and prioritisation of the various regulatory obligations affecting the industry