Q1-23 in the investment front-office environment was definitely challenging in terms of hiring activity compared to historical norms. It’s fair to say that collectively the industry was expecting a positive start to 2023 post a tough 2022 for most industry participants. Plans for strategic growth hiring and backfilling from departures in 2022 were planned and on schedule for activation. However, many plans did not come to fruition in Q1, as the global market recovery faltered, and conditions deteriorated soon after the start in January.
Taking a positive view, over the past two weeks there has been a notable shift in the broad market macro narrative giving forward guidance for a more positive outlook, or at least a lot less negative than previously dark recessionary forecasts. This positive improvement in the narrative can be attributed to a variety of factors, notably tempering of hiking momentum from central banks, broadly improved market conditions and asset price valuations and increased investor confidence. It remains to be seen how long this positive trend will continue, but it is certainly a welcome change from the challenges faced in Q1.
Assuming that we have reached the peak of inflation and interest rates and that central banks are beginning to ease their policy stances, this must be seen as a positive sign for the future. Companies should interpret this as a directional signal that financing costs will probably decrease through the back end of ‘23, providing them with more flexibility in their financial budgets.
Advice for clients:
If companies are planning to increase their headcount, it is essential to plan ahead and initiate the hiring process now. Interview processes for mid-senior level positions can typically take up to 6-12 weeks, with as many as 7 stages including reports, tests or presentations required to reach the final round or offer stage. Additionally, quality candidates typically have 3-month contractual notice periods on exit, making it crucial for companies to plan at least 6 months in advance.
While it is hopeful that the broader market conditions will improve by Q3/Q4 of this year, waiting until then to confirm the need for hiring will be a risky strategy. Companies will probably miss out on top talent or be left with a shortage of critical roles if they delay the hiring process. Therefore, it is recommended that companies start planning and executing their hiring strategies now to ensure they are prepared for any opportunities or challenges that arise in the future.
If you are concerned about how the current market may affect your position, or to discuss how we can support your hiring processes in the current market, please get in touch with Principal Consultant in Investment Front-Office, Gareth Connellan at firstname.lastname@example.org