Let the good times roll

Does a three-month pick-up in the employment market signal a resurgence in employment opportunities in the financial services sector through 2004?

That is the question being asked by recruitment consultants, as they reflect upon what they admit has been one of their toughest ever 24 months.

The degree of difficulty being experienced through most of 2003 was underscored by the number of major financial services companies that continued to cut staff and the willingness of people to move between jobs in pursuit of security as much as salary.

However, where financial planners were concerned, consultants noted that the expected impact of the new Financial Services Reform (FSR) legislation on commission arrangements meant many were looking for higher base salaries.

With the compliance issues associated with FSR a central focus for most financial services companies over the past 18 months, employment consultants noted particular demand for specialist compliance and legal personnel, with demand growing later in the year for marketing and communications personnel.

However, the underlying trend during the year saw specialists more in demand than generalists.

The general tightness in the underlying conditions through 2003 was confirmed by recentAustralian Bureau of Statisticsdata for the finance and insurance sectors that shows the number of jobs actually declined by nearly 30,000 in the eight months between January and August.

And while these job losses are largely attributable to continued downsizing within the banking sector, they put in context other data contained within the Department of Employment and Workplace Relations publication,Job Outlook,which says that over the past five years, employment in the sector rose by 11 per cent, or 34,700 jobs.

The general consensus among recruitment consultants is that the pick-up in the financial services sector really only began to emerge around six months ago and has only developed genuine momentum in the past three months.

Senior consultant withTMP Hudson, Shelly Pokorny, agrees, saying that the real turnaround has only been detected in the past three months.

She says the demand has been for financial planners, while the market for paraplanners and technical support people is still weak.

Pokorny says there has also been demand for sales and marketing and back-office functions, while demand for compliance and risk management personnel has been strong all year, with some firms opting to hire them on a contract basis.

“What we’ve also noticed over recent months is that there are more management roles coming through,” she says.

This is something endorsed by the executive director of theFinancial Recruitment Group, Peter Dawson, who says the pick-up began around six months ago and has certainly strengthened over the past quarter, driven by a need for personnel in compliance and marketing and communications.

“The pick-up we’ve seen in the last three to six months is better than anything we’ve seen in the past three years,” he says.

Looking at the broader picture, Pokorny says the recent pick-up was preceded by a general contraction.

“There’s been a consolidation — a consolidation between organisations and reductions within some organisations, particularly where they’ve found themselves with too high a head count,” she says.

Pokorny says that while the shadow shopping survey produced by theAustralian Securities and Investments Commissionand the Australian Consumers’ Association in February impacted dramatically on consumer sentiment, attitudes among planners have changed.

She says planners have been moving as much for opportunity as for money.

“In the past it was hard to attract planners away from boutique operations, but something we’ve noted lately is a willingness by planners to move to the major banks — something that may have been driven by the recent downturn and the desire for access to strong databases with which to pursue clients,” Pokorny says.

“With commissions now being in question, planners have been looking to increase their base salaries, albeit that there has not been a lot of movement in this area,” she says.

Dawson says that together with the general pick-up in employment prospects in the sector, there has been an increase in salary levels, particularly in specialist areas where there are perceived to be skill shortages.

According to most consultants, educational qualifications are playing an increasing part in the selection process, but grey hair counts, as well in terms of managing relationships.

Pokorny says that where educational standards are concerned, there is a move towards DFP 6 as a minimum and CFPs are highly regarded.

As for salaries, large firms are paying in the order of $42,000 for someone with DFP 1-4 and up to $70,000 for DFP 6 or a CFP with up to three years experience.

Boutiques will, of course, pay more if a planner can bring clients with them and six figures is not out of the question.

“There is certainly more movement out there and more positions being created, particularly in areas to do with compliance, business development, and marketing and communications,” Dawson says.

The principal ofThomas Hancock and Associates, Tom Hancock, agrees that the employment market has been depressed and attributes this to the downturn in international equities and continuing uncertainty about the global economic outlook.

He says one of the primary manifestations of this uncertainty has been a significant reduction in job mobility.

“People, particularly those in senior and middle management, might be ready to move if the right job comes along, but they simply aren’t moving because of the continuing uncertainty,” Hancock says.

Like Dawson and Pokorny, Hancock says while the best people can still demand top dollar if they are being headhunted, a lot of people are pursuing opportunity rather than money.

Looking at the year ahead, most consultants are optimistic that the pick-up will continue through 2004.

“Clients are expecting a better year next year, provided the equities market picks up. Which will be good because we’ve had a pretty tough year with some of the banks imposing staff freezes at the beginning of the year,” Pokorny says.