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Scottish Financial Services is a Candidate-Driven Market

21 July 2011

By Richard Arnold, Head of Allemby Hunt's Edinburgh office.

The latest Bank of Scotland report confirms the Scottish labour market is continuing to improve, albeit at a slower rate than for some months, and still is significantly out-performing the UK as a whole. It also highlights the continuing upward pressure on permanent salaries.

This is good news for the Scottish economy, but the trend masks a growing problem in Scottish financial services recruitment.

Whilst Scotland gives employers ready access to a pool of young, graduate-calibre candidates, at more senior levels, recruitment increasingly is candidate-driven. Despite the well-documented job losses and continuing fall-out from the likes of LBG and AEGON, people with specialist skills are in demand - and they know it!

Ironically, the Scottish success story in attracting major global organisations to base significant parts of their businesses in Edinburgh and Glasgow has created intense competition from key players chasing a very limited number of people. This has been exacerbated by significant growth in opportunities for gold collar contracting; this highly lucrative career path prompted many people to re-invent themselves - and a whole new lifestyle - removing upwards of 10,000 people from the skilled, permanent candidate pool.

The impact of this has created problems filling permanent programme and project roles. Whilst some organisations are trying to switch gold collar workers they would like to retain into permanent roles, there doesn't seem to be any real appetite amongst contractors to look to the future and step off this gravy-train and it is evident there are large financial services organisations still hiring contractors on up to one-year contracts, whilst some openly are reluctant to hire candidates into permanent roles if their contracting careers have become well-established. In these circumstances, it seems unlikely the permanent candidate pool will be bolstered by mass returnees during the next six months.

Operations and governance are good examples of where the skills shortage has bitten deeply. Candidates with strong credentials are proving particularly stubborn to shift. At VP level and above, they are picking and choosing, factoring-in every aspect of a potential move right across the range from lifestyle implications to the financial rewards before deciding whether to throw their hat into the ring; there are also examples of candidates accepting a position, resigning from their current employer and then continuing to pursue second and third job options during their notice period before accepting one of these and disappointing their would-be first new employer.

For a recruiter, there are positives to be drawn from these difficulties. They provide a genuine opportunity to build strong, consultative client relationships; the necessity to be more innovative and value-adding, and to be capable of conducting an effective search much more widely - often internationally - makes for a much more interesting and rewarding recruitment challenge.

When recruitment is strongly candidate-driven, quality comes to the fore in both candidates and recruiter. At an industry level, the introduction of new blood into the Scottish candidate pool can only be advantageous'.