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In The Face Of Uncertainty, Financial Services Embraces Consultants

As a financial services professional, you know that the market can be volatile at times.  When there is more uncertainty, it is important that the industry answers with caution.  In response to the current market, a new hiring trend has emerged: a number of institutions have begun gravitating toward hiring more temporary staff.

“Amid some shake ups, organizations are doing their best to stay afloat, which has meant some layoffs and hiring freezes throughout the global markets,” says Alex Wright, a Senior Managing Director within The Execu|Search Group’s Accounting/Finance division.  “There is always another downturn in this industry, so in the face of ambiguity, financial institutions have become more careful.  In order to continue working effectively, they have turned to freelancers and consultants, which allow them to save on overhead costs and be more strategic when hiring.”  While there are many factors that have contributed to this new trend, Alex suggests the main causes for the current spike in temporary hires are:

Compliance: Since the 2008 economic crisis, financial institutions are subject to higher scrutiny from government entities like the Securities and Exchange Commission (SEC).  “In particular, the effects of Dodd-Frank and the Ani-Money Laundering (AML) regulations have put more strain on financial organizations,” notes Alex.  These restrictions have required those who are affected to hire compliance specialists to be certain that they are following guidelines.  “In the event that a compliance specialist is needed, they tend to be hired for short-term assignments,” says Alex.  “These are either to advise on how to best satisfy regulations, or to investigate a potential violation—both temporary in nature.”

‘Brexit’: The aftermath of the United Kingdom’s vote to leave the European Union has sent shockwaves throughout global financial markets.  Next to New York City, London is the second largest financial hub in the world.  Because this decision will affect future trade agreements as well as the value of the euro and the British pound, there are incredible amounts of uncertainty in the wake of the vote.  Once the process officially starts, the UK has two years to complete their exit from the European Union.  As a result, the ambiguity currently taking hold will last throughout that time frame as the effects of the ‘Brexit’ still remain unknown.  “The immediate aftermath has included some layoffs or hiring freezes throughout the financial industry, and organizations are looking for ways to continue operating adequately,” says Alex.  “For example, many support or back office roles are becoming temporary positions for the time being.”

The Presidential election: Election years are historically rocky for stock markets—once again, their unpredictability can create an unstable environment.  This is particularly true when an incumbent is not seeking reelection.  During those election years, the S&P 500, a widely watched benchmark of U.S. large-cap companies, has dropped an average of 2.8%.  On the contrary, when a sitting president is up for reelection, the S&P 500 is up an average of 12.6%.  In a polarizing election such as the one we are currently experiencing, the stakes are even higher for the market.  “This is another reason why support and back office roles are being increasingly filled by consultants,” asserts Alex.  “Additionally, Wall Street compliance has played a major role in this election.  Financial institutions, as a result, are facing increased pressure to hire compliance specialists in order to stay in line.”

For all of these ambiguities and regulations, financial services professionals are in an excellent position to gain valuable experience through temporary work.  “Freelancers and consultants are terms you don’t typically hear in financial services, but that’s quickly changing,” says Alex.  “One of the main benefits of taking on this type of project-based work is that employers are looking for people who can hit the ground running, giving you the opportunity to gain much more experience in a shorter period of time.”  As the industry is adjusting to this hiring model, this has led to the growth of temporary roles in two areas:

  • Entry Level: While many institutions begin to see the benefits of a temporary staffing strategy, professionals looking to get their foot in the door can take advantage. In such a fast-paced industry, these opportunities will move extremely quickly, giving you the chance to learn more in less time.  “Not only can you develop your skill set and gain expertise, but you can gain credibility and cultivate a robust resume,” observes Alex.  “The benefit of working for several distinguished financial institutions is invaluable.”  In addition to that, working as a consultant gives you more flexibility in an industry where this is often lacking, and when you do work overtime, you can receive time and a half.
  • Specialists: For highly specialized professionals, working as a consultant is often more beneficial.  “If you have an in-demand and specialized skillset, you can earn a premium rate for your services,” notes Alex.  “This is especially true for compliance and AML professionals, who are desperately needed at a moment’s notice.”  These specialists are typically brought in as a reactionary measure, which means that employers only have one question: have you done this successfully before?  Because of the tight turnaround involved and the high pressure of complying with federal regulations, these consultants are in an exceptional position.