Two months into 2025 and the job market already feels noticeably different from this time last year. We’re registering far more senior roles, and firms are beginning to make strategic hires again (expanding into new channels and building new teams). However, the outlook is not entirely clear, thanks to the NI increase. What an act of self-harm that decision is. Had the Budget been left alone, I have no doubt we’d be looking at a much stronger recovery.

Hiring activity has picked up, but in some cases, feedback has been painfully slow. It is too early to draw firm conclusions, and school holidays seem to have an increasing impact on decision-making these days. However, I have said it before, and I will say it again “don’t help your competition hire”. If you are too slow, you will lose candidates and find yourself stuck in an endless interview cycle as your preferred choices accept offers elsewhere. We do our best to manage this, striking a balance between politely nudging for feedback and avoiding being a nuisance. That said, keeping candidates engaged and informed is a much-underrated part of the recruitment process. Firms that understand this and act quickly will always secure the best talent.

The financial services sector is long overdue some movement. A stagnant market affects everyone. Junior employees, who are learning at pace, find themselves unable to progress into more senior roles. Experienced professionals, who have so much to offer, end up sidelined when there is no available seat. Firms often aspire to be low-turnover environments, but some turnover is healthy. It creates room for fresh thinking, increases innovation, and allows people to feel they are advancing in their careers. Encouragingly, things seem to be improving, and the market is beginning to move again.

Hopefully, this momentum will continue to build – particularly once bonuses are paid.

One issue that keeps cropping up is how firms develop next gen talent. Most refer to those under 30 who, quite naturally, operate in a different world to executive teams. Many firms want to ensure a steady stream of new talent is entering their business, but the old methods of networking have either disappeared or become unrecognisable. The City folk of the late nineties and early noughties vintage seem to have largely built their networks with another sort of vintage in their hand. Evening events, once a staple of professional networking, have fallen out of fashion as younger professionals opt for yoga classes or other activities that do not involve staying out late. Cold calling, another traditional method of building connections, is also becoming increasingly difficult. With so many professionals working from home, direct contact numbers are harder to obtain. So managers take a deep breath in readiness to dust off their cold calling skills, grab the phone, and promptly put it down upon hearing their “target” is WFH. This leaves many firms in a difficult position. Managers hire top-quality junior talent and then face the challenge of helping them develop their networks—because until they do, they remain a cost. Some firms have found solutions that do not involve senior people diluting their own client bases, but it is harder than many realise, particularly in a low-growth environment. Marketing plays a huge role, as does structured training, but this is an issue more and more businesses are struggling with. If you are facing the same challenge, you are not alone (wasn’t that a song).

One clear trend that remains strong is the increasing reliance on fixed-term contractors. If the pandemic taught us anything, it is that an expensive fixed-cost base can become a major liability when circumstances change. Long office leases, large internal hiring teams, expensive software subscriptions, and extended notice periods all became a burden when firms had to adapt quickly. Contractors provide a far more flexible way to address short-term needs, whether solving immediate regulatory issues (SMF vacancies) or filling unexpected leadership gaps. They can step in quickly, and in many cases, they prove to be the best choice for the permanent role. The flexibility of this model benefits both employers and candidates, and it is only becoming more popular.

One trend that does appear to be slowing is the migration of financial services professionals to the UAE. The majority of those motivated to make the move did so in 2023, and many of those who remain in the UK have since ruled it out. My view is based on personal experience, but what is clear is that Dubai and Abu Dhabi have now firmly established themselves as major financial centres. The UK is no longer just competing with New York, Paris, and Singapore for talent, we are also competing with the Gulf. This shift is not a temporary one; it is structural and permanent.

In the run-up to Christmas and at this time of year, we receive a lot of requests for salary information, and we are always happy to help where we can. That said, context is everything when it comes to salaries. A conversation will always provide a more accurate picture than a simple data request. If you need insights, do pick up the phone—we are always happy to talk. If you are interested in data, take a look at some of our recent polls here.

If you are looking to hire or exploring new opportunities yourself, feel free to reach out to me on 01525 864 372.