There is no doubt that it is a more challenging market currently to attract talent in across the Financial Services sector. Unrelated to the Individual Accountability Framework, we have seen a high level of cost control measures being put in place this year across the Financial Services sector which naturally has had an effect on the number of roles being released to the market.
Really, we can look through two lenses when assessing the impact of IAF on the labour market. Firstly, we must assess the sentiment at Company level and for HR functions and then on the market, how are individuals feeling about the regulation.
Firstly, in terms of HR and recruitment teams, we are seeing the regulation already having an impact by adding another layer of complexity to the hiring process particularly at PCF level and this is evidenced in the recent Mazars & Compliance Institute report which shows that 90% of firms believe that IAF will make it difficult to recruit for PCF roles. This is less evident at CF level although still a consideration which needs to be accounted for.
There is also no doubt that the regulation is adding a further administrative burden on HR teams and hiring managers when it comes to onboarding new hires due to the enhanced due diligence and documentation required for PCF’s and CF’s. We have also seen a marked increase in the scrutiny on the approval process for PCF holders and we can confidently say that this is creating pressure on a firms ability to identify staff. It is vitally important, therefore, that HR teams and hiring managers understand that processes are taking longer and to plan their hires accordingly.
There is certainly mixed sentiment generally towards the regulation depending on your personal appetite for risk with a sense of trepidation the most common, particularly for those at PCF level or considering going for PCF roles. Many are concerned about the impact of the regime on their future career progression. IAF has the potential, therefore, to derail or be a positive for companies when it comes to hiring new staff and retaining the existing teams.
Communication with employees is vital to demystify the regulation and those firms who do this most effectively will be the ones who can better attract the talent they want when they need it.
Individuals are now really looking at the buy-in from senior management and the board to the regulation, when it comes to them considering staying in their current role or seeking a move. What job seekers are looking for really is clarity and effective communication in relation to what they are going to be responsible for. That is a point both for recruitment and retention. Being clear on role profiles and responsibilities, therefore, when going to market is key for HR teams. We are also seeing an increasing appetite from individuals to move into senior positions in unregulated firms and non-PCF roles in regulated firms so there is certainly a need for HR teams to give a layer of comfort to candidates during the interview process.
There is an opportunity for companies to view the regulation as a badge of approval when it comes to hiring staff. Culture really is at the heart of the regulation for HR professionals, hiring managers and companies generally. From conversations that I have had, however, in recent months, the new regulation is certainly being seen as a positive in the sense that it is an evolution of culture, it is a maturing of culture and an enhancement of current processes rather than changing everything and starting from scratch. We are seeing the necessity for buy in from senior management as a key point in terms of how effectively the regulation is being embedded. Setting the tone and not being defensive about the regulation is key along with the need for a collaborative approach across the business with HR, Legal and Compliance at the forefront.
It is also worth noting that the regulation is certainly having an impact on salaries and is driving them upwards; many individuals are looking for a premium to step into PCF roles, for example, so HR and hiring managers certainly need to price this into their thinking when scoping out role requirements and assigning budgets to those roles.
