By Will Jones, Managing Director UK & North America at COMATCH

The end of the year often spells job cuts in the banking and private equity markets, but in 2022 these have seen a marked increase. Since the beginning of December reports indicate that there have been significant cuts in the workforce at Barclays, Credit Suisse, and Citigroup while HSBC is reportedly shedding hundreds of senior management posts. For many banks that are restructuring and laying off multiple jobs, these are the first redundancies since 2020.

The uncertain economy — which is affecting all industries – poor performance, and third-quarter earnings dropping below expectation, have conspired to make financial organisations address those departments and roles where a surplus headcount can no longer be ignored.

However, it’s important to look at these latest cuts in the broader context. While there is no doubt that the number of people employed in the financial services sector has dropped, the slide has not been sudden, and has had much to do with banks closing their high street branches. Automation has also played its part in replacing some workers, but equally, positions that were once regarded as banking roles are now regarded as IT roles, which has further impacted the ‘banking employee’ statistics.

Difficult conditions

A recent Economist Intelligence Unit Finance Outlook 2023 report says: ‘Weakening economic output and rising interest rates will lead to more difficult conditions for banks, insurers and fund managers in 2023 than in the past two years.’ Undoubtedly this is true, but this is an industry that has been re-shaping itself on the global stage for years; that has digitally transformed to unlock innovation and a first-class customer experience; and which after recovering from the crash of 2008, is unlikely to let the current economic climate disrupt its regeneration efforts.

Cutting jobs and other costs can help to alleviate immediate problems, but the lessons for survival learnt since the pandemic hit in March 2020 and which focus more on creating opportunities out of challenges, have the same relevance now.  To that end, the Deloitte 2023 financial services industry outlook points out that leaning in on smart strategy and execution and focusing on talent, technology, risk, regulation and purpose will help financial services leaders to navigate the path ahead.

Top talent

Let’s look more closely at the part played by talent. It has long been a problem for financial services companies to find and retain the best talent, and in recent years, employees who can understand and optimise digital solutions. The side shoot emergence of FinTech start-ups who are disrupting the sector has only served to make talent recruitment even more of a challenge for the longer established organisations still transforming their legacy infrastructure.

Much attention is given to the importance of attracting millennials and GenZ applicants whose familiarity with digital technologies gives them a perceived head start and the energy to shape future success. But experience across a range of business functions, particularly when steering an organisation through troubled waters, is essential. Given the recent redundancies and the likelihood of a recruitment freeze, financial services companies are in danger of reducing headcount at the expense of growth.

To combat this, a change in their business models should be considered, which will enable interim talent to step in on a short-term basis. Interim professionals are usually introduced to fill gaps when executives leave unexpectedly, to help with organisational change or to support specific initiatives. The COMATCH platform, which is a marketplace for independent consultants and industry experts      across many different sectors, including finance, has managed a 45% increase in requests for help with ‘interim projects’ in 2022. We surmise from this that organisations are realising that when expertise is needed quickly, whether for a CEO, CFO, IT expert or product manager, they can source an available and highly experienced candidate within 48 hours. Equally important, the span of the project and the budget are under the control of the company, and they can be confident that the interim candidate will hit the ground running as soon as they start and finish as soon as the project ends.

Interim executives have already developed and proven their skillsets, and while they will come into a financial services company with experience from working across the industry, they will undoubtedly also have worked in other sectors from which they have developed a more rounded expertise. Their objective is to bring their raft of capabilities to bear when supporting companies during uncertain times. Like millennials they are positioned to deliver energy, but they also provide a focused approach designed to achieve their aims. And because their position is temporary, they remain independent of established relationships in the company and more objective about the steps that are necessary to make.

Sourcing cost-effective support

Naturally financial services companies will question the outlay on recruiting an interim executive when they are laying off existing staff. However, not only do interims come in to fill senior gaps and to carry out specific projects, they are also extremely cost-effective. Where senior employees cost companies not just their salaries, but pensions, bonuses, holiday entitlement, private health schemes and company vehicles, interim managers are paid only for the days they work.

While many interim professionals work at a senior level and are experienced at devising strategy, their capabilities also include implementation. They are focused on getting the job, for which they have been employed, done from beginning to end, with a keen eye on cost and profitability. Should the organisation decide to introduce a new banking app and it needs planning from concept to delivery, this is where an IT expert interim manager can assist. If the branch network needs to be reduced by 40% and a strategy put in place to support customers, an interim with experience in customer relations can step in and they can be sourced from independent consultant marketplaces.

We are stepping into 2023 full of trepidation about what is ahead, and the financial sector is already shifting to meet challenges. It’s important for senior decision makers to know that if they do need experienced help to support them on a temporary basis, they can source this quickly and efficiently from a marketplace that can supply expertise from a wide pool of talent.