Market Update – Feb 22
I find myself writing this as war returns to Europe. What a sad thing to have to write, what an awful attack on a sovereign country. Whilst I doubt there will be many ramifications for the City hiring market, the City will be responsible for implementing some of the sanctions. I spoke to Keith Grindlay of Macro Economics earlier this month, and Keith highlighted the implications for the UK and world economy of this attack. Russia and Ukraine are responsible a third of the world’s wheat exports, with many of these headed for the Middle East and Africa. Of course, we all know the implications for gas prices. This will cause real problems for businesses that cannot pass these price rises on, many of whom may already be in debt post-pandemic. It would certainly be occupying my thinking now if I were a politician, in order to avoid job losses later in the year. We’ve generally done a great job in the UK protecting jobs and businesses and it would be a shame to stumble now.
The hiring market continues to be strong. The world of work is now starting to settle into a pattern. With the exception of hedge funds and investment bankers, most firms are opting for three days a week in the office and two at home. Most are conducting first interviews via video and following up with an in person meeting - it’s more time efficient and one of the real positives to come out of the pandemic.
However, these changes require different skills and now is a good time be thinking about not only the team you need, but the leaders you need too. It was very interesting during the pandemic to see how people reacted. Some people moved early, accepted changes, and have essentially thrived. Others fought the change, have tried to emerge the same business as they were before, and, I think, will struggle to compete moving forwards. More flexible structures - buildings that sway, trees that bend, and companies that change - are far more robust than rigid structures.
Blockbuster is often cited as a business that didn’t change. Indeed, today I believe there is one Blockbuster store left. The critics levy that the winds of change were obvious, although hindsight is an easy thing, but if a firm like Blockbuster can be swept away by change, we all can.
However, it’s not just business models that need changing. Business plans don’t write or implement themselves. Businesses can become anything they want to. There are plenty of examples of conglomerates starting in one sunset industry and transforming through organic growth or acquisition into something else. The only difference between firms and their future prospects is the people they hire.
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Clearly at C-suite level, people have more influence to make this change. That said, firms now need to be evaluating which of their team embraced the challenges and changes of the pandemic and those who fought new ideas. The agents of change are the leaders of now and the future. Management today also takes different skills. Command and control is gone – for now at least. Modern workers need to understand the “why” of decisions more. They need purpose. It can be very hard at times, sometimes having to justify even the smallest decision, but the larger your team the more you will encounter this. Also, leaders need to be open, and humble enough, to listen to ideas from their teams.
It's well known that financial services firms are facing competition for talent at all levels. For next gen talent, it’s coming from outside the industry from the usual suspects of law, accountancy, management consulting, and more recent entrants like tech. However, within the industry we’re seeing greater interest in fintech. The culture of a fintech couldn’t be more different than an investment bank, and that’s the appeal for many (for both industry veterans and new entrants). This doesn’t mean that fintech is right, because it’s new and on trend, but both parts of the industry can learn from each other and cherry pick the best parts of culture that enable their teams to really excel.
I’m naturally a pessimist. The attack on the Ukraine appals me, but doesn’t surprise me. However, I am very excited for the future of financial services and the world of work.
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