One of the most in-demand aptitudes in financial services so far in 2016 is knowledge of MiFID, particularly MiFID II. With the risk of heavy financial penalties and the potential of having their licence revoked if the company is not brought in line with this regulation by DATE, most FS companies are looking to hire people with working experience of MiFID compliance projects, some as contractors, some as permanent employees.
We’ve seen this particular perm vs contract argument before, most recently regarding Solvency II - whilst businesses initially wanted to appoint employees to avoid paying contract costs, most companies quickly realised that the urgency of the impending deadlines (ironic, in retrospect!) meant that a long recruitment process to fish from a drastically reduced resource pool was actually going to cost them more in the long run. When it came to Solvency II, the market realised it was contract or nothing.
So that begs the question as to why companies now faced with a similar situation - looming deadlines and limited resources - have reverted to the attitude of “we’ll only look at hiring permanently”.
On paper, it’s actually a good idea. Whilst the financial world is accustomed to new regulations being introduced often, the acceleration of business worldwide in the internet age has led to a seemingly neverending influx of new rules that all financial companies have to adhere to. Once the latest regulations have been applied to a business, there will almost certainly be another proverbial hoop for a FS company to jump through. So hiring permanent compliance experts seems to be a clever idea.
In reality, however, it’s not working out. It’s a case of clients confusing what they want with what candidates want. In a market ultimately driven by money, candidates are not going to pass on the opportunity to leverage their experience against higher rates on contract. Unless all financial companies are going to agree amongst themselves that they will only hire compliance officers on permanent, there will be a buoyant contract market. And even then, the reality is that there are still too few workers available to cover the country’s collective workload.
In order to avoid being at the back of the queue at a vital time for their business, clients need to take firm action - and quickly.
The most obvious piece of advice is “hire contract” - competitors in the market are already doing it and the best candidates are being locked into lucrative, long term projects. If you don’t move quickly enough, and as harsh as it is to say, you’ll be looking at the market’s leftovers.
And if you are absolutely insistent that hiring permanent staff is the only way to go, our guidance is this: you’ve got to make candidates the proverbial “offer they can’t refuse”.
A salary at least in the ballpark of what they might earn on contract. A benefits package to encourage them to give up the many benefits of working as a freelance consultant. A chance to develop their career that makes it genuinely worth their sticking around long term. An engaging office environment that will make them never want to leave. Offers of “just a well-paid job” may still work on contract but if you’re going to insist on going perm, you’re going to have to dig deep to sculpt an offer that will stand above those of the competition.
And when the consequence of potentially getting it wrong is so extreme, surely it’s worth investing in getting the right pair of hands to steer your company through the seemingly neverending compliance storm ?