As we approach the end of 2024, many of us will naturally find ourselves in a reflective mood

As we approach the end of 2024, many of us will naturally find ourselves in a reflective mood. In this newsletter, which is full of observations from my 20+ years in financial services recruitment, the first thing I’d highlight is that I’m often astonished by how many people intend to take their foot off the gas in December. That might be fine if you work for yourself, but I suspect many shareholders wouldn’t be thrilled to know that, in addition to August being a "foot off the gas" month in many firms—and Fridays often written off—December has now become another write-off month.

I had the privilege of working with some brilliant entrepreneurs in the early noughties. They were decent people who created a lovely working environment, eventually selling their firm for millions. They always said, “December is as good as you want it to be,” and they’d inspire their teams to push right through the line. People genuinely enjoyed working at their firm. We need more managers like that, and I don’t begrudge them one penny of the millions they made.

The UK has now experienced what feels like its annual election cycle. Most of our clients seem to have taken a sanguine view of the Budget: “Not good, not growth-focused, but it could have been worse,” is how the mood seems to be summed up. I won’t dwell on this, as it has been well covered elsewhere, and ultimately, we shall see in the coming years whether the US or the UK fares better, given their increasingly divergent approaches to growth. As an aside, not one of our clients has mentioned National Insurance as an issue, though perhaps they’re just thankful they’re not in the retail or hospitality sectors, which are shouldering considerable burdens.

Many in financial services will be glad to see the back of 2024. Where hiring has occurred, many firms have used the opportunity to reduce their wage bills by “juniorising” roles. This is a hallmark of any downturn—replacing senior staff with more junior employees. Interestingly, one of the major frustrations I hear from leaders is the lack of real relationships within their teams. They often feel their people don’t truly know anyone outside the office. Building relationships and connecting in person is a skill that’s often overlooked but is highly developed in those with more workplace experience.

Another hallmark of a downturn is increased technology adoption. I think we’ll see a lot of this in retail and hospitality. As I often say, having visited high-wage Norway for 20+ years, a feature of high-wage economies is the prevalence of self-service options—buffets, self-checkouts, and the like. I expect these trends to become more prominent here as well. Additionally, we’re beginning to see clients experiment with AI in various areas of their business. It’s early days, but many are exploring how AI can improve data integrity and make existing employees more efficient. However, in time, these advances will likely lead to reduced headcounts unless the economy returns to growth. For instance, Liontrust has just announced plans to make 12% of its workforce redundant as it moves towards a "new target operating model," supplemented by technology investments.

Active asset management has faced significant challenges since early 2022. Initially, the difficulties went unnoticed, but by the time Liz Truss became Prime Minister, firms were already feeling the impact of outflows. Many assumed things would improve once she left office, but sadly, outflows continue. Active asset management is struggling to articulate the value it adds, a situation exacerbated by the seemingly relentless rise of the S&P 500. This pressure has led to significant reviews of sales and marketing functions. Some firms have cut their sales teams (a decision I believe to be a mistake), while others have sought new channels and markets or revised their product offerings. Credit and private equity seem to be the winners here. My gut feeling—though not the most reliable barometer—is that ESG investing has taken a step back.

The burden of reporting within firms sometimes feels overwhelming, with many spending as much time on compliance as they do on actual business. The City seems to welcome the government’s comments about reducing regulation and encouraging regulators to consider competitiveness and growth in their decision-making.

This year has also seen employers gently—sometimes not so gently—encouraging staff to return to offices. At the same time, the exodus of talent to Dubai has continued, which is concerning. Leaders and HR teams are grappling with challenges they never anticipated, and I suspect many look back on the pre-pandemic years with real fondness.

At Fram, we try to make sense of what we observe and, without breaking confidences, share patterns we see that might help improve your business or manage your career. You’ll find many articles on our website here: https://framexec.com/resources/ . It’s not all doom and gloom, either. We regularly meet firms that are bucking the trend—growing, confident, and on the front foot. That said, it has been a challenging couple of years. It’s been a challenge for us too, but Fram has maintained its headcount, and we’re very grateful to everyone who has supported us over the years. I hope our clients feel they receive plenty of added value and insights. We learn a lot from our clients, too, and one of the best aspects of working in financial services is encountering brilliant minds.

It’s been tough for many, but collaboration is key to progress. The firms we see thriving are those engaging with others, exploring opportunities, and staying active in their networks. Financial services, like recruitment, is ultimately a people business, which is why spending some time in the office remains so important.

How have you found 2024? I’d love to hear your thoughts on anything raised in this newsletter. Also, I’d be grateful if you could “like” and share the article if you’ve enjoyed it.