SCOTLAND'S financial sector must wake up to people's rising expectations regarding pay, and look to hire staff from overseas centres to ensure it expands successfully in 2014, a recruitment specialist has declared.
These challenges are identified by independent Edinburgh-based recruitment company Core-Asset Consulting in its Salary Guide 2014 published today.
While citing these challenges, Core-Asset highlighted buoyant recruitment activity last year, which it said had continued into 2014. On the back of these strong hiring trends, Core-Asset believes the Scottish financial sector is well placed for a year of strong growth.
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Betsy Williamson, managing director of Core-Asset, projected that the Scottish financial sector would, in 2014, achieve the strongest growth since the period leading up to the global financial crisis.
This crisis began to unfold in 2007, and intensified with the collapse in autumn 2008 of US investment bank Lehman Brothers.
Ms Williamson said: "The levels of recruitment activity during the first six months of 2013 were higher than is typical, and more importantly we saw none of the traditional slowdown that normally characterises the last quarter of the year.
"Perhaps even more crucially, barring the festive break, 2014 has started as strongly as 2013 ended. This, together with the continually improving economic background, suggests that 2014 is set to be one of the strongest periods of growth for the Scottish financial sector in many years."
But she added: "With this growth comes challenges. And in terms of recruitment, these centre on two key aspects: setting appropriate levels of remuneration and sourcing the best talent in sufficient numbers."
In 2013, Core-Asset dealt with hundreds of vacancies across the Scottish financial sector. Core-Asset, which has about 20 staff, does more than 95% of its recruitment work in the Scottish market-place. As well as running the company, Ms Williamson remains engaged in senior and executive level recruitment.
She highlighted a shift back towards a candidate-driven labour market in financial services, from an environment in the wake of the financial crisis and amid the ensuing downturn in which employers have had more power.
Ms Williamson said: "If the Scottish financial sector is to take full advantage of the changing economic fortunes, it is crucial that companies find the right balance between rewarding employees while ensuring remuneration is sustainable."
She added: "Employees are already anticipating better times ahead, and are feeling increasingly entitled to what they view as fairer levels of remuneration, including bonuses and positive salary reviews.
"But some companies are failing to recognise this change in expectations, operating under the misapprehension that we are still in a client-driven labour market. In reality, the momentum is swinging firmly towards the candidate, especially among professionals with in-demand specialist skills and appropriate levels of experience."
Ms Williamson declared that the move of Scotland's financial sector into recovery phase was leading to a surge in demand for high-calibre candidates with niche skills and specialist experience.
However, she believes that companies will have to look outside Scotland, to international financial centres such as Singapore, Hong Kong, New York, and Melbourne, to fill some of these posts.
Ms Williamson, noting companies were replacing staff shed during the recession and recruiting for expansion, said: "This demand cannot be met exclusively within our relatively small and restricted Scottish labour market, or indeed within the wider UK. In order to grow, companies also need to look overseas if they are to find the right talent, and in sufficient volumes."
She added: "The benefits of such an approach are clear. Having access to international candidates significantly increases the talent pool from which applicants can be sourced. It greatly aids the recruitment process when searching for hard-to-fill roles, as well as bringing greater diversity to any business with global or international aspirations."