Market Update – Jan 22

Simon RoderickMarket updates

Notes from the park - monthly updates
Notes from the park - monthly updates

Market Update – Jan 22

As we start a new year, MD Simon Roderick reflects on the National Insurance increase, employment prospects and the rebuilding of corporate culture.
January 25, 2022
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The year is off to a quick start with all areas of our business busy. The financial services industry has shown remarkable resilience and ingenuity to navigate this awful pandemic, and of course there is luck (or bad luck) involved as to what sectors were most affected by restrictions.

I feel that financial services will continue to go from strength to strength, and employment prospects for those who work in the industry are positive. I do have concerns about other industries, though. For some time I’ve been writing about the decision to increase National Insurance. Let’s be clear, this is a tax on employment and it will reduce hiring in small firms, which employ 60% of the UK’s workforce (source: Federation for Small Business). It will also hit consumer confidence.

Time will tell what the real effects of the pandemic are on the jobs market. Loans will need to be repaid, efficiencies from technology improvements will kick in and these factors could reduce employment. Equally, we could have significant growth and the UK could see a continuation in the drop in unemployment and a skills shortage. There was a fascinating article in the Telegraph recently on the health of the employment market, implying all may not be what it seems. The article highlighted that there are 600,000 fewer people working than before the pandemic, self-employment is up, hours worked is down by 3% from three years ago, the number of economically inactive 50 – 64-year-olds has increased, and wage growth isn’t keeping up with inflation (suggesting in most industries there isn’t a skills shortage).

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Some of these issues may be temporary, but some are worrying if they move from being a pandemic trend to long-term trend. However, it does highlight how well financial services have coped, because I can’t think of many firms that aren’t now in growth mode and whose longer-term trends don’t look good.

2022 will be a year of financial services leaders, and all business leaders, re-establishing and re-building their corporate cultures. Often this is one of the few differentiators firms have, and building culture has been one of the biggest challenges of remote working. It should also be a year of investing in emerging talent, which has been dislocated from more experienced colleagues they can learn from. After the financial crisis, many firms didn’t invest enough in trainees or middle management, and by their own admission there was often a real gap in experience in many businesses. I think firms will avoid making the same mistake this time around, but it’s something to be mindful of.

After a trial period, we are now operating a hybrid working model at Fram, which I think meets the needs of all stakeholders. We’re also allowing colleagues to log off earlier on a Friday and we’re increasing time off. The mental health of our team is paramount to us and small things, like leaving for a weekend away early, can make life all the more enjoyable.

We look forward to continuing to work with our clients in 2022, and we look forward to working with far more clients and candidates in 2022. If you are thinking of hiring, or you’re looking for careers advice, do reach out to one of our experts.

Want an informal chat? Contact us on 01525 864 372 / [email protected].

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