Market Update - February 2022

February is over and into March we….March?! I know Feb is a short month, but that one really did go quickly. Maybe for me, because I finally took my son on his first snowboarding trip after failed attempts in 2020 and 2021. But it’s been a very busy and productive month, with companies going full steam ahead with their hiring plans as we head into the final month of Q1!

Included in this update?????????????????

• Key senior finance hires for February
• Vacancy and job market update
• UK M&A market growth
• Thoughts ahead for Q2

Key senior hires for February?

Following on from January’s update, senior finance contractors are in high demand! We’ve had clients looking for year-end accounts/audit support, systems implementation and extra support to cover busy periods. Due to the shortage of available contractors, some companies are paying a premium to secure a candidate. We are noticing a trend when speaking with contractors knowing how the market is at the moment, and their day rates reflect this.

Some clients are struggling to find candidates for very short-term roles, with so much choice out there for candidates; we are seeing they are tending to favour slightly longer contracts. 6 months+ seems to be ideal for most, but even 3 months+ will make it more attractive. If you are struggling to find someone for a very short role, perhaps speak with the wider finance team and see if there is more work for the contractor and if there is a possibility to keep someone on to help in other areas. Extending the length of the contract will look more attractive to many candidates.

The newly qualified market is an area that shows no sign of slowing down yet. Many clients are competing for top talent and it’s a very busy part of the market. There’s a high demand for Big 4 trained ACA qualified Accountants, with many clients trying to attract these candidates for technical financial reporting roles. When quizzing clients about their reason for wanting a Big 4 trained ACA, it seems to be their perceived strong technical accounting knowledge and experience. Interestingly, the most common areas we see Big 4 ACA’s looking to move into are Corporate Finance/M&A/Commercial Finance/FP&A or often a hybrid between these. When speaking with these candidates, most are interviewing at 4-5 other companies and are likely to receive multiple offers, so we have had clients come to us struggling to hire.?

Vacancy and job market update

Vacancies have increased once again, hitting another all-time high of 1,298,400! That’s almost 2 years of constant growth and to think we hit the pre-pandemic all time high back in July last year and it’s still been growing since. The levels of growth and investment into the labour market is unprecedented but interestingly, it is showing signs of slowing down.?

A client of mine recently asked if I thought it was a case of “What goes up must come down?!” I suppose that will always be inevitable at some stage, it’s hard to think how much longer the increases in hiring sustain this level of demand. That being said, I don’t expect they’ll come crashing down anytime soon, but the last two quarters have seen a decline in the rate at which the increase in vacancies has been growing. This quarter was 9.6% compared to 24.7% in the previous quarter. The slowing rates may be a sign that at some stage this year we see the vacancies begin to plateau. Although, with 1.3m+ vacancies the market will still remain extremely buoyant and I do not see the competitiveness of the candidate market changing for quite some time.

UK M&A market growth

PwC have said that the UK M&A market has outperformed the global market in 2021, with the UK increasing by 56% compared with 2020 (global increase was 24%). The article mentions fluctuating global stock markets, and that their latest CEO survey found that US business leaders now see the UK as their most favoured growth market, putting us ahead of China for the first time! KPMG reported that the UK was number 3 for M&A deals accounting for 9% of total global deals, behind China in 2nd place (11%) and US in first (19%).

It seems CEOs are seeing a great deal of opportunity when looking at some UK company valuations, making them extremely attractive for more M&A activity across 2022. I know from a senior finance perspective this is an area in which we are noticing a shortage in candidates with skills from the initial due diligence work on deals through to post acquisition integration.

Thoughts ahead for Q2

This month has seen the UK government end all Covid restrictions and also the legal requirement to self-isolate when testing positive for Covid. Now that doesn’t mean people won’t have a moral duty of care to let their employers and colleagues know about testing positive and companies having their own internal policies. From speaking with many of my senior finance contacts, it seems most companies will still be advising people to work from home and isolate following a positive test; where working from home is a luxury most senior finance candidates have. Other jobs, in the hospitality sector for example, won’t and with no additional sick pay to cover being off work with Covid we will have to wait and see how this impacts things.

I expect the candidate market in Q2 to be as competitive as my son and I playing Mario Kart (extremely). Below I have highlighted 4 tips to help you with your process! These are all common areas we see companies failing on during their recruitment processes:

• Sell the role! Have a detailed and informative advert/job description. During the interview explain the role, the business and plans, the team and culture and where this role can take them.
• Make sure your hiring process is clear, simple and effective. 2 stages should be more than enough, and you can always double up on calls to stick to this. Don’t delay going back to the candidates in between and be quick to schedule 2nd stages. Even a 1-day delay could result in losing the candidate to another offer.
• Discuss what the candidate is looking for at the start of the process but then again towards the end. An underwhelming initial offer can be hard to come back from, so you want to make sure it’s an attractive package.
• Start your onboarding from the moment the offer is accepted. Get the contracts out ASAP. Arrange for them to come in and meet the team/go for lunch/drinks. Then regularly check in with them during their notice periods as we are seeing an extremely high counteroffer rate and it’s not always when they first-hand their notice in!

Thank you for taking the time to read our market update. As always, if you would like any advice on hiring, candidates, salary benchmarking or just a general chat about the market, please get in touch.