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Yet again we approach the bonus season for Bankers – not much seems to have changed and yes, we are still talking about it!
The public in the main are still angry about their pay, shareholders undoubtedly have strong views too but are powerless to influence change and block large pay outs to bosses.
Mr Cameron says he is determined to end the “merry-go-round” of super-rich bosses rubber-stamping each other’s enormous salaries and being rewarded for failure – even if that means legislation.
Research from the Institute for Public Policy Research (IPPR) suggests chief executives in 87 of the FTSE 100 companies took home an average of £5.1m in basic pay, bonuses, share incentives and pension contributions in 2010-11.
This represents a year-on-year increase of 33%, while the average increase in company value was 24% according to the think tank.
Does this “make your blood boil” as Mr Cameron says?
This maybe a solo position but I am not against a bonus culture, providing it is linked to positive performance and within a scheme that contains the necessary checks and balances to monitor this. Isn’t this how all businesses run?
Clearly not all banks are the same and we should not tarnish them all with the same brush ! However, it would be a very sad indication of an overall banking culture if legislation was needed to control a fair bonus culture.
What are your thoughts on the matter?
Angela Hickmore is a Director at Interim Partners.
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With the G20 summit failing to reach a conclusion over the weekend we have to wonder where and when this will all end! Everyone recognises the crisis – “Europe will be crippled by debt till 2021″ says Merkel but the solution seems to allude.
Having just come back from Dublin where the economy is now showing very small signs of growth there is fear that the harsh austerity measures taken in the last 12 months will all be in vain if this new crisis is not sorted.
And what about the UK? We’re not in the Euro (and as a Cabby told me it’s simple for us as we can print more money!) , but this will undoubtedly impact us.
The E & Y Item club reported in the Sunday Times that Britain’s Gross Domestic Product could fall by 4% to below it’s level during the 2008/09 recession. Over 3 million jobs (this does not include the interim/contract community) in the UK depend on trade with the EU and politicians are saying that resolution of this crisis “is the most important thing to happen to the UK economy this Autumn”
Even closer to home Interims are asking me what the effect is on the interim market and interim opportunities. Sadly I have no crystal ball for the future but whilst there are signs of some areas of the Market contracting in certain non critical business areas, we need to remember the Market in general has not stopped. Yes Its harder, decision making is sometimes slower and sometimes not made at all but there are still opportunities!
The REC job outlook for September 2011 indicates demand for interims and contractors will remain at current level or increase over the next 12 months. Over 2/3 of employers surveyed are planning to keep their contract workforce over the next 3 months and 22% saw increases.
But the most interesting statistic of all is this one – 86% of employers are planning to match or increase the number of non permanent staff, deferring commitment to permanent staff whilst there is economic uncertainty.
We benefit in the UK from a Market that understands the value of a flexible workforce and corporate agility. The positive impact of an experienced interim who can achieve operating efficiencies and cost reduction, who can show the quickest way forward on achieving transformation and who understand the FS regulatory landscape is not lost.
So tell me what you think about the Euro crisis and it’s impact on the UK?
If you’re an interim do you see fewer opportunities or no change and if anyone has that crystal ball maybe they would like to share!
Angela Hickmore is a Director at Interim Partners.
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It’s been a good week for the customer in Retail Banking!
Lloyds has made a commitment to “improve customer services” whilst Santander is bringing it’s contact centres back from India to the UK to “improve customer service”. As for the new banks Metro Bank’s philosophy is “banking focused on the customer”.
So why is it I am not convinced that Customer Service will improve – are you? How many of us can really put their hands up and say they are really pleased with the service from their banks and if so what does “good ” really look like? What is the role of the branch in good customer service and if on-line Banking is the way of the future how do banks show good customer service with a face less channel?
What do you think?
Angela Hickmore is a Director at Interim Partners.
Click here to read other blogs on the Financial Services sector
I read the Independent Banking Commission’s Interim Report (well, the Exec Summary to be precise) and the overwhelming message seemed to be we must improve the balance sheet of the banks, return to stability in UK Banking and make it safer.
Almost 3 years on (and billions of pounds later) one would have thought that we had achieved the above and that a sense of sanity and normality had returned. Undoubtedly there have been huge strides taken in introducing more robust controls and guidelines as to how the banks operate and much work done on improving compliance and operational risk frameworks across many financial institutions as a result of this stronger governance. The emergence of new retail banks is a positive move and in some cases there is a push back to traditional, safe banking, with much focus on customer service which is a good thing.
However, that doesn’t mean that all of the skeletons are out of the closet and that there will be more challenges ahead. N&P were fined £1.4m by the FSA last week but it also has to pay £51m to 3200 customers in compensation for failure to give fair and appropriate advice over Keydata Investments. A full independent investigation has now been launched to review all of N&P’s product sales through its advice arm to see whether there are any other examples of mis-selling. The theme of mis-selling doesn’t stop there as we enter the murky world of PPI. The ironic thing is that the banks had called for this judicial review having argued that the new complaint procedures set down by the FSA last year were wrong and also argued that FOS should not be using FSA principles in judging such cases. However, the law felt differently and the appeal brought by the BBA was lost.
So a victory for consumers? Well in the first instance yes as the banks have to revisit any PPI sold from 2005. The FSA estimates that compensation pay outs could total £4.5billion and 19 firms have already been fined for mis-selling this product.
However, the cynic in me says that this will not all be good news as I watch adverts immediately appear for ambulance chasers for PPI and as the banks begin to look for new ways to recoup from the consumer what will be a dent in profitability and the loss of time and admin in settling these claims.
Still, for those of you who remember the bad old days of endowment mis-selling and the resource hungry projects of clients dealing with thousands of complaints, this should clearly be a signal for the hiring of interim resource! For those able to create process and manage teams to deal with the complaints as well as those able to apply their knowledge of the regulations to case workloads, this should be a busy time. Every cloud has a silver lining! The madness continues!!
Angela Hickmore is Director, Financial Services at Interim Partners.
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And already its February and the year seems to have got off to a good start from a financial perspective!
The FTSE is above 6000, financial markets were led by the Bulls last week – equity and commodity prices raced ahead on the news of good economic data and UK Markets rallied on strong manufacturing and growth in construction and key service sectors. Sterling rose to a three month high on the back of The Purchasing Managers index, a good barometer of economic activity which reached a high of 62 – the highest level since the Index began in 1992.
The Interim market, too, has also got off to a good start. Financial Services continues the trend of the last three years with strong demand for Change and Transformation professionals as well as interims in Compliance, Finance, Risk and HR.
Other vertical markets are also experiencing healthy levels of enquiries for additional resource to help in areas of Operational efficiencies, Performance Management, Financial Transformation and Investment in infrastructure projects.
So what about the year of Austerity? Despite this , I still think its here. Everyone is feeling the need to tighten their belts. Job cuts in the public sector, returning trends in outsourcing./ offshoring, higher food and petrol bills impact us all in different ways and drive us to question our spending and ask “Do I really need this, is it good value for money ?”
So no surprise, our Clients our asking the same questions about hiring Interim Managers and this is changing the type of assignment handled and of course the pricing.
Do I really need this person is usually a “Yes” if the assignment is “mission critical”, is it a “must be done activity” or alternatively, will it be revenue enhancing. This is the starting point.
However, Clients then are seeking re-assurance and confirmation that the Interim Executive has a very clear understanding of the task needed to be done and that they have seen it, done it and can “hit the ground running”. This can be the moment of truth as to whether it is really mission critical and the indecision to hire or not is often the cause of long delays, an increasing feature of this market which is also teaching us patience. It’s frustrating all round. Having just changed roles myself recently I can sympathise with this but sadly we cannot tell you what we do not know, although I do believe we have an obligation to keep Interims in the loop and to update you at regular intervals even if it is to say we have no news.
To achieve a level of comfort for the Client, a strong partnership is required – Client, Provider and Interim.
Good providers such as Interim Partners, will be seen by their Clients as Trusted Experts and an effective broker. They will work with Interims so that relevant skills/ experience are highlighted, will ensure a full brief on deliverables and culture is given, and will validate relevancy of the Interims for role with robust due diligence. This can help immensely in getting the initial meeting with the client as well as offer the final reassurance to hire. The Partnership then continues as providers work with Clients and Interims throughout the assignment to optimise delivery through agreed deliverables and milestones.
Interim managers and Providers have to demonstrate overtly the value they can bring.
But before the deal is closed, comes the negotiation. As the partner in the middle it is in our interest to make sure we achieve the best deal for all parties. This is never easy. Transparency is key and common sense does need to prevail on both margin and day rate. The dichotomy in some sectors such Financial Services is that whilst demand is high and Interims maybe we getting multiple calls with potential assignments and may receive multiple offers, Clients are influenced by the macro economic picture and that is one of austerity and cost control.
This is a hard message to deliver but it is reality. Interim Providers themselves are facing on going margin pressure against increased costs of due diligence in the form of CRB checks, sanctions checks etc and so this is not a one sided attack.
However, for the interim managers though there are some negotiating points and possibly some upsides which can be included in the negotiations such as some flexibility to work from home, longer term assignments as well as building cv collateral for the future by being part of some of the most interesting programmes of change in Europe. Creativity and Innovation is needed whether that be in offering a 2 day free introduction to the Client to get the assignment kicked off or other ways to get a deal closed.
So I do think in 2011 we will see Interim pay rates fall – I don’t have a crystal ball but I think on non specialised areas this may be by 10-12% and for specialist areas such as Compliance, rates will be maintained at the levels of 2009/2010 which remained fairly constant.
2011 will also drive some changes in mindset. It’s a year when we as providers have to adjust our thinking on how we tackle UK Corporate and sell the benefits of Interim Management – for Interim Partners this is around sector specialisation, having the most experienced team in the Interim sector, and a unique framework which allows the Client to see the progress of the Interim at any point during the assignment. For interims, it’s about building good relationships with providers, responding quickly to any communication and working with us to show case the unique experience you offer and the benefit to the client.
Always end on a positive note they say, and for me this is despite the feeling of austerity, I think that the Interim market has the potential to grow in 2011 as UK Corporate continues to responds to the need for efficiency, competitive positioning and changing market conditions. With many companies with lean management teams and insufficient resource , a solution is needed which goes beyond Consultancy use or permanent hires. This is Interim Management.
Angela Hickmore is Director, Financial Services at Interim Partners
Click here to read other blogs on the Financial Services sector
