Recruitment Market Review 2010/2011

2010 selectively saw a return to hiring for certain sectors within Industry. Broadly, this sector in many ways reflects the general economy and it can be seen that the multi-national sector and companies that have an export market. The indigenous market has been slower but improved in Q4 2010 and into 2011. We expect this trend to continue into 2011. There is no real pattern emerging in this sector, however hiring is steadily on the increase and there is a definite sense that cut backs, so evident in the past 24 months have ceased and companies are focussing on growth. This growth however is happening sporadically and many of the ailments of the wider economy are hampering businesses growing their work force.

The indigenous market has been slower but improved in Q4 2010 and into 2011.

However, there is a steady increase in the number of mandates coming onto the market and there is strong competition for top talent across all levels. In fact, one of the continuing factors in the market is the short supply of accountants with specific skills sets. This is evident across the board but particularly highlighted in roles such as financial analysis, internal audit and technical accounting roles.

Employers are continuing to be selective in their hiring process

Employers are continuing to be selective in their hiring process with many of them finding the hiring process slower than expected. What is needed and we expect to see this in 2011 and into 2011, is a return to confidence with job seekers and a willingness to venture out and investigate new opportunities. It can be clearly seen that there is an abundance of people interested in moving jobs but given the ongoing economic backdrop are still sitting tight. This makes the selection process difficult.

Salaries have remained fairly static over the past 18 months

Salaries have remained fairly static over the past 18 months, however there is evidence that these are beginning to creep up slowly and for the first time in many areas bonuses are being paid, albeit at lower levels than in the past.

Overall the Industry sector will steadily improve and the number of new roles will increase. New companies are coming onto the market, both indigenous and international, and existing companies are positioning themselves for growth. However, we don't expect this to really accelerate until more confidence comes back with job seekers and the market in general.

The Banking and Financial Services recruitment market enjoyed a turbulent 2010 but saw a return to the recruitment market for the majority of banks. After a moderate to quiet Q1 – Q2 there was a welcome uplift in Q3 with increased activity in several areas, which continued into much of Q4. 2010 saw these institutions come back to the market, largely on a contract basis, to help staff areas critical to their stability and growth such as restructuring, recovery and credit functions. This has continued into 2011 where there is noticeably more activity, predominantly at the mid to senior level. The majority of banks have just come through a blanket hiring freeze, with exception to business critical hires, and as a result have found gaps within various departments due to natural attrition.

"Gaps within various departments due to natural attrition"

Continuing on from 2009, 2010 saw the majority of domestic banks maintain a salary freeze, which lead to a flow of candidates moving between banks in order to secure an otherwise elusive pay rise. This salary freeze hit the lower end of the candidate pool the hardest with a significant number of candidates still on entry level salaries even though they have up to three years' experience under their belts. There was some evidence of internal promotions (and increases) in core business areas of domestic banks but by and large, things remained static throughout 2010. Foreign banking entities enjoyed unprecedented access to Irish corporates and this has translated into a slightly more attractive salary outlook for 2011 as they seek to take advantage of the turmoil that domestic banks have found themselves in.

One interesting trend that we noticed throughout 2010 and which is set to continue into 2011, is the increased focus on Transaction Banking and Inward Investment within the corporate banking market. This is an area that was largely left to its own devices during the Celtic Tiger as banks focussed more and more on commercial and corporate lending and as a result there is a distinct skill shortage across areas such as Cash Management, Trade Finance and Working Capital. Now as liquidity has been drained from the economy and banks no longer have the same ability to lend, they are refocusing on this forgotten area as a way to maintain their client base. Candidates with a strong track record in this area are finally getting the recognition they deserve and are finding themselves in an increasingly stronger position when it comes to salary negotiation either internally or when looking for a career move.

"Increased focus on Transaction Banking and Inward Investment"

We expect 2011 to follow a similar trend to 2010 in that there is an on-going need for banks, both domestic and foreign, to strengthen their recovery, restructuring and credit departments. We will finally see the impact of the necessary restructure in the domestic banks, with retail and non core business areas likely to be the hardest hit. We also expect foreign banks to continue on a growth trajectory within corporate banking and capital markets, but since their teams are significantly smaller than the domestic banks, this will more than likely be on a case by case basis as displayed in 2010.

Given the volume of recruitment that we saw in this area in the preceding two years 2010 proved to be very busy with hiring levels rising significantly.

The recession had a huge impact on professional services with the majority of firms facing an uphill battle to maintain fee income as troubled clients looked to renegotiate terms or in certain cases faced foreclosure. This coupled with firms undercutting each other to win new clients resulted in widespread hiring and salary freezes across the industry and in most cases firms were forced to make cuts or redundancies across their business.

2010 saw a return to the recruitment market

2010 saw a return to the recruitment market for the majority of firms as they sought to replace roles critical to their business and hire extra staff to help with increased demands from their client base. The main players in the market were the Top 20 firms and in particular "Big 4", but we did notice an upturn in recruitment assignments from Small, Medium and Boutique firms. There seems to be a renewed optimism in this area with the majority of firms reporting growth (albeit small) and putting plans in place for further recruitment in 2011.

Growth Areas:

Audit
There has been a significant increase in hiring in Audit, with candidates that possess experience in ICT and FS audit being in particular demand.

Debt Advisory
An obvious side effect of the recession has been the increased demand for debt advisory services and we have even seen a number of boutique firms established to compete with more established firms.

Business/Management Consultancy
As businesses look to the future in the hope of righting the wrongs of old we have seen an increase in the demand for business consulting services, with a strong emphasis on cost and financial efficiencies coming to the fore.

Insolvency and Corporate Recovery
Firms transferred a huge number of corporate finance staff into this area through 2008 and 2009 but with an ever increasing workload they have had to go the market in volume with newly qualified recovery seniors being in high demand.

Majority of firms transferred staff in this area into Corporate Recovery and Insolvency.

2010 saw a lot of consolidation in the Taxation market with intermittent senior hires being announced. Strategic hiring focussed on candidates that could bring work with them and immediately add value while the focus for everything else was on retaining key staff. Corporate finance departments also suffered with virtually no activity on the M+A side and a lack of confidence in the stability of future pipelines. As mentioned above though, the majority of firms transferred staff in this area into Corporate Recovery and Insolvency.

There has not been a significant increase in the value of new job offers but at least there are more opportunities

There has been a thaw where pay freezes once reigned and we even saw some long overdue promotions announced. There has not been a significant increase in the value of new job offers but at least there are more opportunities. Clients in this sector are still very particular about who they hire with "Big 4" looking for staff from large firms, which has meant that it has been very hard for talented staff from smaller firms to make the step up. We expect this to change however, as the talent war reignites and we move back towards a candidate driven market.

All in all 2010 proved positive for Accountancy practice and we expect this to continue into 2011.