It’s no secret that investment management – and UK financial services in general – is grappling with a talent shortage.
Just seven months ago, a review commissioned by the Chancellor of the Exchequer warned that tech is luring away candidates with key skills who may otherwise have taken up finance roles. Uncertainty around Brexit continues to compound the issue, with more than a quarter of London-based finance employees hailing from overseas.
This isn’t a new problem. Indeed, the industry’s skills gap widened by 30% between 2015 and 2017, compared to a 20% contraction across the whole UK economy.
Meanwhile, the investment management market continues to expand. By the end of 2025, global exchange-traded fund assets could touch the $25 trillion mark, up from “just” $4.8 trillion in 2018.
In short: our industry needs talent. But that talent isn’t easy to access. While we’re starting to see a handful of firms offering voluntary redundancies, we’re still very much in a candidate-driven market because the real A-players aren’t the ones who’ll be taking those packages – typically, it’s people who are thinking about a career change anyway and maybe want a break before they re-enter the job market.
But that doesn’t mean it’s impossible to attract exceptional talent. Here’s what you can do to find the right people in a candidate-led market:
- Understand what candidates want
A study published at the start of 2020 claimed that more than half of UK workers want to find a new job.
January seems like a decade ago. Given everything that’s happened since, we can probably assume that more candidates are settling for security rather than actively looking to move. But while that might be helping your retention in the short to medium-term, it also makes it even harder to hire new talent.
To persuade A-players to give up stable, secure, well-paying positions, you need to understand what they actually want:
- 28% of workers are dissatisfied with their current pay, with 29% of those considering a move believing they could earn more elsewhere;
- 23% don’t feel valued in their current role;
- 18% are frustrated by a lack of opportunities for career progression.
What’s more, at the time that survey was carried out, 76% of respondents reported feeling stressed at work in the preceding six months, and 64% said their sleep had been affected. The same number felt like they were “always on duty”. After spending months on end sitting at their dining tables and sofas glued to a laptop screen, it seems a fair bet that those numbers have increased.
So we know that in general, a lot of employees want to earn more, want to feel more valued, and want more progression. And we know their current roles are making them feel stressed.
Obviously, when you find an A-player, you’re not going to run a negative campaign against their existing employer. But it’s entirely reasonable to highlight what you can offer that their current employer doesn’t.
- Hone your hiring process
Only 2.4% of UK organisations say their recruitment and selection practices are “very effective” in helping them source and secure quality hires.
As we discuss in our recent article “How Investment Management Firms Can Revamp Their Hiring Process”, we know that this is a big concern for our industry, and that a lot of you feel your hiring strategy is preventing you from accessing the talent you need.
There are lots of ways in which your hiring process could be holding you back. But some of the biggest and most common issues that we see are:
- Unrealistic job requirements: When many organisations depend on applicant tracking software to sift through CVs and reject those that don’t contain certain keywords, a wealth of exceptional talent is being disregarded for pretty arbitrary reasons.
- Over-reliance on referrals: They’re a popular practice (and they mean you don’t have to pay recruiter fees), but there’s no evidence to support the view that referrals lead to better hires.
- Lack of transparency: In a bid to attract talent, it’s easy to oversell your company or the scope of a role. It might work in the short term, but people hired under false pretences are unlikely to stick around.
- Failure to understand what works: Few firms actually measure the success of their recruitment efforts to understand which channels or tactics result in the best hires.
- Improve your employer brand
“Employer branding” is one of those phrases that we recruiters love to throw around.
But it’s not just a buzzword or a short-term trend. It’s the way that your past, present and future employees feel about your business.
Even candidates who you don’t hire can affect your employer brand. If they have a bad experience during the hiring process, 72% will share that experience, either online or directly.
If you’re a big brand, talent will already have an opinion about what you’re like to work for, and whether they’re interested in you.
For smaller brands, there’s a good chance that their first impression of you will be formed when you reach out to them about a role (or a recruiter does it on your behalf).
Why’s it such a big deal? Because first impressions are everything. Three-quarters of candidates consider employer branding before deciding whether to apply for a role. If your employer brand is weaker than your rivals’, you’ll struggle to hire and retain the best people – and even if you do, it’ll probably end up costing you more.
- Identify the talent you really need
The investment management world has changed dramatically over the past decade. In fact, it’s changed dramatically over the last six months. Yet we keep relying on the same three factors – skills, experience and “culture fit” – to define whether or not a candidate is right for us.
You might be thinking: “If it ain’t broke, don’t fix it.” But the fact that we’re facing a talent shortage in the first place suggests that it is broke, and it does need fixing.
After all, if you keep on judging talent against the same criteria, never changing your approach, you’ll keep on hiring the same types of candidates, with the same experiences, personalities and values. Two in five people working in finance have parents who worked in the same sector (for comparison, the national average is more like one in eight).
It’s hardly surprising then that we’re faced with a diminishing talent pool. And even though we’re evidently good at attracting a certain type of candidate, there’s no guarantee that those candidates are really the best people for your business.
There are alternatives, though. Tools like The GC Index (and others) go several steps beyond those traditional hiring criteria by drilling into the actual impact that a candidate will have on your organisation, helping you find people who’ll naturally make the biggest positive difference – regardless of their background, gender, ethnicity, or any other irrelevant demographic factors.
- Make your mind up
On average, the UK job interview process lasts nearly a month.
It’s significantly longer in the investment management industry. In our experience, the average is more like three months, although it can last as long as 12 months for some senior roles, and for positions within the investment group (such as fund managers and analysts).
That’s far too long. If it takes more than a month to decide whether a candidate is a good fit, that’s probably not because they haven’t been persuasive enough – it’s because you don’t really know what you’re looking for, or don’t have the confidence to make a decisive call. And that attitude is harming your ability to hire genuine A-players.
When you find an exceptional candidate, make your mind up quickly. The market is challenging enough already, so don’t wait for your rivals to speak to them too, or for their current employer to make them a better offer. Chances are you’ll have to fight off a counter-offer anyway, so don’t make your life more difficult than it needs to be.
Restrict your interview process to the absolute minimum number of decision-makers who need to be there – and don’t be afraid to push back on other leaders within your business trying to get involved.
At Berkeley Croft, we drive investment management firms to thrive and succeed by unearthing the high-calibre candidates that will transform your organisation.
Find out how we can help you access the talent you need to deliver on your business strategy