The Scottish investment industry pays between 15% and 20% more in retention wages just to keep staff working in specialist roles in finance and client services.
Staff working in areas such as tax and audit, socially responsible investing, environment, social and governance, risk and compliance and business change, are part of a “point hot” of skills due to the increased number of people embarking on projects.
The salary trend, which is expected to continue throughout 2022, was highlighted in the seventh Guide to annual salaries in the Scottish financial services sector by Core-Asset Consulting.
The report suggests that investment operations – historically seen as the cogs of investment firms and fund managers – have shifted from a client-driven market to a candidate-driven market.
Rachael O’Neill, associate director of investment operations at the Edinburgh-based consultancy, said: “Demand has also been proportionately affected by a change in perception of investment operations functions, which has outgrown the role of business catalyst and is now seen as a true competitive advantage and instrumental in cost reduction and decision making.
“It is now increasingly accepted that expert personnel in cloud-based technologies, redefining information flows, providing deep data analysis of investment processes and creating an agile and resilient, makes a huge contribution to day-to-day decision-making and this has been essential in enabling investment firms to respond quickly to the market turmoil created by Covid.
Mark Carruthers, former chief executive of trade body Scottish Investment Operations, said: “At mid-level in particular there is a real skills shortage which is impacting the sector and this is driving a candidate driven market – conversely, in leadership positions, there is very little movement.
“We are particularly short of regulatory roles, with too few people able to effectively support regulatory changes and associated downstream reporting.”
“There is also a real challenge for managers to revamp the camaraderie after such a long period of working from home and a real reluctance by some to return to the office.”
While the market for candidates remains limited, employers looking to increase their payrolls are facing the pros and cons of a pandemic-accelerated transition to flexible and remote working.
The guide revealed that the lockdowns have fostered a change in mindset about the importance of working from home and work-life balance and that a flexible working model will be increasingly important for businesses and investment operations teams.
Changes in working practices and technology platforms mean third-party investment operations firms need to be realistic about the scale of the challenges needed to support clients, Core-Asset said.
O’Neill added: “Remote working means a geographically flexible workforce is now a more feasible option for Scotland-based businesses and the demand for talent in these niches has been somewhat mitigated by the capacity hiring companies to have employees based anywhere in Britain.
“There will continue to be significant skill shortages among candidates, with skills ‘hot spots’ including fund accounting, performance, client services, implementation, oversight by third parties, corporate actions, trading support, settlements, derivatives and client governance.
“Candidates are starting to place more emphasis on the ability to work from home, rather than having a set percentage increase on base pay levels when switching roles.
“Workplace or organization culture, potential reward, diversity, sustainability, progression, job variety and ethics will be some of the metrics candidates will fully value in this market. more complex.”
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