Following on from a busy H1, I have collated the following report covering Distribution Recruitment within the Traditional and Alternative space. I will delve into the current recruitment landscape, exploring various factors that influence the demand and supply of skilled professionals in the Distribution Space. I examine the industry’s evolving needs and shed light on the key experience sought by employers in this field, as well as the reoccurring requirements that active and passive candidates have in their job search. I have drawn the following opinions from conversations with my extensive candidate and client book.
Market Conditions
In Q3 of 2022, there was a rapid change in government which knocked confidence and the markets became volatile and weak.
There was an expectation that there would be a recession caused by rising interest rates. At the end of last year and early Q1, several of the largest investment managers were on hiring freezes. Cost-cutting was at the forefront of everyone’s minds, and hence expendable or unessential talent in the firms was the first to suffer.
However, in the first half of this year, despite rates going up by more than many expected, the recession did not materialise (at least not yet), markets improved, and confidence recovered. This is outlined by the GfK Consumer Confidence indicator in the UK rising to -27 in May 2023 from -30 in April. Whilst this number is still negative, it is the highest it has been for the last 15 months. As a result of this, many asset managers and other businesses decided to take the brakes off and revisit their expansion and hiring plans.
However, strategy has changed. Many of my largest clients filtered through a lot of the most senior talent in their firms and have tried to replace them from the bottom up as such. This has opened up far more opportunities for junior talent to enter into businesses with clear progression and the hope that there will no longer be the dreaded reason to look elsewhere because one has ‘hit a ceiling’ in their current firm. This is an excellent way of increasing retention of staff which long term, will save budget.
My view on the matter is positive, but I can’t help but feel that once all of this junior talent has been sourced, will there be too much managerial responsibility on the few that are left in very senior positions? I anticipate that business cases will need to be made internally to hire at a more senior level. There needs to be direction, tenure and experience in a team. Your time will come is what I am trying to say. Junior talent needs to reach out now to recruiters and find their next position if they are keen to make a move, senior talent needs to be patient.
How to access the best calibre of talent? What are candidates looking for?
Post-covid, candidates have become punchier when it comes to work-life balance. Many I speak to say they would never go back to a 5-day in-the-office working week. Whilst many traditional shops still have the WFH split, alternative asset managers often don’t offer it. This has limited the number of candidates who move between the two as personal requirements aren’t being accommodated for. I am in two minds here. In order to access the best talent, not restrict yourself to a certain pool of candidates, and still keep both sides happy, working from home should be incorporated.
If we were to make WFH a privilege for when candidates pass probation, or once they have gained your trust and demonstrated their ability, I believe that both sides would be satisfied. Not only will this enhance candidates’ training and your working relationship, but this will also encourage a more committed approach to coming into the office. So rather than sporadic days here and there, I believe that people who have been working in the office 5 days a week, are far more likely to see the benefit of coming in and be keen to keep a regular structure.
From a hiring perspective, freedom and respect are being given to new employees, but as a line manager, you can feel confident that the work is being done to the same standard. Additionally, having people in the office, to begin with, allows them to fully integrate with the team and the nature of their new firm. This will increase retention as relationships are built, familiarity is established and people will view the office as no longer merely work, which ultimately will result in loyalty.
As you can see from the below graph, Distribution candidates’ second highest priority is flexible work arrangements. Therefore if you are not offering any WFH policy at any career stage, you are cutting yourself off from over half of the talent on the market.
What employer value propositions are most important for this talent?
Has the market changing positively affected candidates in private markets?
In Private Markets, there is a surge in Placement Agent hiring. With the ever-mentioned budget cuts, several firms have decided to outsource their sales teams to placement agents. There is a spike in my placement agent clients insisting upon candidates having both the technical gravitas as well as that natural sales persona. This has enhanced their competencies to a whole new level as there is no longer any need for firms to fear that the sales will be too transactional.
Hence, fewer salespeople being needed in-house. I believe that this will ultimately lead to a spike in the hiring of in-house Investor Relations people over the next half of this year.
More and more, IR roles are incorporating Project Management, Investor Relations and Servicing as well as Cross-Selling. I consistently hear from IR candidates that they are looking for a more encompassing role, with a varied quantity of day-to-day tasks, in which they can ‘roll their sleeves up’.
On the other side of the coin, those who are on the Capital Raising/Sales side often want to focus predominately on exactly that, and drive their numbers to the max in order to enhance their track record. It therefore seems to me that due to the market changing as a result of budget cuts, candidates are actually going to gain greater satisfaction from their roles as the adaptions are lending themselves to demands.
Concluding Comments
Thank you for taking the time to read through this report. If you have any questions or would like any more details on the above, I would be happy to catch up via a call or coffee!
Sophia Pitts| Consultant
+44 (0)203 598 5500
sophia.pitts@goodmanmasson.com
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