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Employee reward and competitors poaching staff are City HR directors' main concerns


HR directors in the City claim their main personal challenges this year are remuneration and the fear that staff could be poached by competitors.

According to survey by Morgan McKinley of 124 HR and line managers within London's financial services industry, 82.9% believe hiring across the sector will increase in 2010, while 16.2% thought hiring levels would stay the same as 2009.

Respondents cited remuneration (60.9%) and poaching of employees by competitors (45.2%) as the main personnel challenges that businesses will face this year.

Over half of those surveyed (52.2%) claim it is more difficult to find good candidates with the right skills and experience than it was this time last year.

Andrew Evans, managing director of Morgan McKinley's financial services division, said: "These survey results reinforce the view that confidence continues to return to the City and in turn the jobs market, with 82.9% of hiring managers surveyed expecting recruitment volumes to be up on 2009 levels. Also, it is very telling that only 5.2% of respondents believe that handling redundancies will be the main personnel challenge for this year but 42.5% believe that competitors poaching staff will be a significant challenge.

"Our findings also highlight that over half of those surveyed are already finding it difficult to source professionals with the right skillset. This is particularly the case for those who are skilled in change and project management as businesses plan to place greater emphasis on organisational change this year. This insight from our survey provides a far more positive outlook for the financial services employment market in 2010 compared with this time last year and indicates there is likely to be an upward trend in job vacancies throughout Q1 and potentially beyond."

But Ben Barrat, head of talent acquisition (finance) for recruitment outsourcer Alexander Mann Solutions, added: "There is no doubt that retention is going to be a huge issue in the finance industry in the coming months. We have already seen some banks offering 30%-40% increases in base salary as a way of retaining staff without using bonuses and employers are going to have to become increasingly creative in their efforts to retain top performers.
"Currently, there is a kind of two-tier system, where businesses that aren't state-financed are looking to take advantage of the talented staff that might be considering their options. Banks know that by investing  in executive recruitment now they can give themselves a great competitive advantage in the future and  so I would expect to see significant numbers of people being recruited by rival banks over the next few months as the battle for top talent escalates.
"Workers in the City tend to have a very good idea of what is going on in other businesses around them and they know that, at the moment, there's a good chance that the grass is greener elsewhere."

Only 5.2% of respondents to the Morgan McKinley, stated handling redundancies would be one of the main personnel challenges in 2010. Less than half of respondents (46.1%) reported the 50% tax levied on bonuses this year will make it more difficult to attract talent to the City.