Is an in-house recruitment team the most effective way of sourcing overseas talent in the finance sector? Virginia Matthews assesses the options.
In financial markets in the City of London, pressure is not just confined to the cut and thrust of the dealing-room floor. The need for talent to maintain performance and competitiveness is so fierce that it has forced major financial services firms to look far beyond the Square Mile for new recruits.
“Globalisation of business in the past three or four years, combined with a deficit of UK talent, has forced us to go further afield to countries such as Australia, South Africa and Canada both for specific skills and for multilingual candidates,” says Charles Macleod, head of engagement at PricewaterhouseCoopers (PwC).
This increased international focus means that tried and tested methods such as trawling the internet or using search firms can only go so far, according to HR practitioners in the finance sector, and organisations are increasingly taking matters into their own hands. At PwC, for example, only one-third of staff are hired through agencies, with the remainder sourced by either employee referrals or direct recruitment.
Setting up a team of in-house recruiters is a cost-efficient solution that helps to fill in many of the gaps, explains Macleod.
“The internet has been a good facilitator of course, but we ourselves have also become far more active on the international recruitment front via our own in-house team, many of whom are themselves ex-agency.
“We continue to use search firms where the skillset is very rare or where the approach must be made in disguise, but in general we like being in the driving seat and are prepared to deploy sufficient resources to allow this to happen,” adds Macleod.
Safeguarding employer brand
Another reason for bringing overseas recruitment in-house is to safeguard an organisation’s employer brand credentials. It is the issue of “being in charge of how an employer’s brand is perceived by potential recruits” that concerns Stevan Rolls, HR director at Deloitte.
“Although we take it for granted that domestic hires know our company and what it stands for, the same is not necessarily true of overseas candidates,” he says. “By handling overseas appointments in-house, we ensure that our brand is represented in precisely the way we want.”
Although internet-based recruitment has inevitably simplified the initial stages of a search, there is no substitute for human contact, Rolls adds.
“You or a third party can do as much upfront screening and video-conferencing as you like, but at some stage, you the employer will need to meet your potential hire face-to-face.”
“Some of the international agencies do a very good job, but to make the cost model work, we believe most of the international hiring should be done in-house and that our recruitment specialists should continue to report in to HR as a whole,” he says.
It may sound as if the trend for financial services firms to go it alone on the international recruitment front would be bad news for recruitment consultancies, but they remain surprisingly bullish about the situation.
Andrew Evans, managing director of Morgan Mckinley, which places all levels of candidates – from fresh graduates to highly qualified financiers – at some of the bigger fund management and investment banking firms, says: “Despite the acute talent shortages in the financial world, the tendency for big clients to deploy ‘direct desks’ as well as outside agencies is helping to fill more posts.
“Some of the direct desks are fairly small, but simply by having a team of people who can liaise with external specialists, pressure on HR is reduced and there is more time for them to focus on HR issues, rather than recruitment,” says Evans.
He adds: “In our view, the talent shortage in financial services is severe enough to warrant a multi-pronged attack on all fronts, but the various forms of recruitment hopefully complement each other, rather than cancel each other out.”
In a bid to identify new talent pools, Morgan Mckinley now runs a dedicated desk that specialises in finding candidates prepared to work in any financial centre in the world.
But if the internationalisation of recruitment has thrown up some interesting cultural differences between candidates – in parts of Asia, it is the norm to switch employers every six months or so while in the US, a common title is vice-president (VP), however humble the job – then it has also brought about a sea change in how recruiters benchmark talent, says Macleod.
“We have found that we need to be more open-minded about people’s experience or even their qualifications, and that, by and large, it is possible to build on a successful candidate’s experience, wherever they have worked,” he says.
Deloitte took 80 people to China last year in a bid to find 20 graduate recruits to work in audit, corporate tax and technology assurance in the UK for four years. And in recent weeks, the first tranche – who receive a paid trip home once a year and are given the option to work for Deloitte in China once their stint is up – have arrived in London.
The careful handling of its new Chinese cohort – who, says Rolls, will receive “more than the usual amount of orientation and support resources in the light of how far they have come to work here” – is applauded by Kate Farrell, associate director of international talent management consultancy Hudson.
“Overseas staff often have a strong work and team ethic and bring welcome new perspectives and fresh ideas, but integration can pose its own set of challenges and needs to be sensitively handled,” she says.
Although HR professionals are fearful of peddling racial stereotypes, there are clear cultural differences to be borne in mind, according to PricewaterhouseCooper’s head of engagement Charles Macleod.
“Around 20% of the students we take on in the UK come from overseas, and although we care far more about what they can do than where they are from, we have inevitably become more sensitive about the different approaches,” he explains.
“Chinese and Indian graduates will tend to be respectful of age and experience and unwilling to challenge their superiors, whereas UK trainees are far more willing to speak up.”
“It’s important to recognise that different foreign nationals have unique attitudes to business, and we shouldn’t expect them all to act the same.”
Stevan Rolls, HR director at Deloitte, agrees: “When you are recruiting domestically, it’s easy to have a blueprint of what ‘good’ looks like. It’s essential to have an open mind and an eye to cultural differences if your hires come from a very different set of conventions.”
Morgan Mckinley’s managing director Andrew Evans believes that “the higher up you go, the more a candidate starts to share an identical mindset, whether they’re in Tokyo or New York”.
“It sounds reasonable to say that British people are more self-effacing than Americans, say, but that’s less true as you move into the senior ranks.”
For Kate Farrell, associate director at international talent management consultancy Hudson, it’s the job function itself that exposes the real cultural differences.
“If you look at HR as an example, then its transformation from a personnel function to a real business operation is fairly unique to the UK,” she says.
However, Farrell sounds a note of caution: “HR professionals coming from other parts of the world would need to be fairly well drilled about their exact remit, because even if their job looks important on paper, it could well turn out to be far less significant than they expect.”