Welcome to this special edition of Market Insights

Richard Colgan – Founder & Group CEO

Happy 4th July and a very big welcome to the Oakleaf Group’s 17th birthday update.  It’s hard to believe that it’s been 17 years since I embarked on this journey. Today, I have over 90 hugely talented colleagues and ambitious plans for the future. In fact, I started drafting this missive sitting in Bryant Park after a client lunch in New York City.  More of that later.

 The big question on everyone’s lips at the moment is whether or not the post-Covid demand bubble is about to burst. If it is, then this is the strangest precursor to recession I’ve seen in 26 years, with demand holding strong at all levels and supply still short.  I guess only time will tell, but we are still seeing strong demand for Talent Acquisition professionals, which tells its own story in my experience.

Oakleaf Group delivered an excellent (post-Covid) year in 21/22.  My Group COO, Gareth Evans, outlines the performance below.  Our core UK (Oakleaf Partnership) business, under the excellent leadership of Simon Hunt and the newly appointed UK MD, Amy Morris, has gone from strength to strength. I’ll leave it to Amy and her leadership team to outline their own thoughts on the market.  The recently launched, Technology, Change & Transformation (TCT) business, under its MD, Chris Jones, is really starting to gather momentum, with the demand for technology professionals seemingly insatiable across all sectors.  Our US reward business, Oakleaf Total Rewards Search (TRS), under the captaincy of the one and only Jamie Newton continues to deliver simply outstanding results state side. With both London and US based colleagues, the business has demonstrated the power of its niche and unique offering.

I’m also delighted to announce that Oakleaf Partnership USA is now up and running (hence my trip to NYC with the new MD, Simon Hunt). The US is proving highly receptive to our offering/USPs, and is a fertile market at the moment.  Simon will be sharing a number of LinkedIn updates this week.  Suffice to say, I wish we had launched this sooner!

Our brand spanking new partnership and group websites are now live.  Please do take a look at your leisure.  I’m super proud also of our new corporate values, created and owned by all.  Oakleaf has always been a great place to work and a firmly values-based business.  I fully intend to ensure it remains so over the coming years. For me, a “thriving culture” has defined the successes of the past 17 years and will shape our future. And our culture is certainly “thriving” and the “new” (post-pandemic) world of work needs HR and technology professionals like never before!

I hope you enjoy our market update and, as ever, please do let me know if you have any questions.  I hope you all “have a nice day” now!

Oakleaf Partnership – UK

Amy Morris – UK – Managing Director

To echo Richard’s words, the post Covid market was incredibly strong with the demand for specialist roles and recruiters seeing the biggest surge. This led Oakleaf to record numbers over last year and has continued strongly into this financial year. The oxymoron of the current instability within global markets and what our consultants are seeing is ever increasing – the ‘war on talent’ is definitely not over, but as Richard says only time will tell.

Last financial year the Interim sector saw the introduction of the delayed IR35 amendment which has made its recovery tougher with organisations having to rethink. Whilst I am delighted to say that we are over the green shoots and back to significant growth we have seen a shift in how clients are engaging with interims. We will be running a market interim summary later this year so will be able to share these market changes then. 

Our footprint is not only growing on the ‘other side of the pond’. This year sees the official opening of our Manchester office. Gavin Jones will talk more about this and our wider regional offering, but I am delighted to say that we have had a huge northern welcome and thank you to our customers for all their support. 

To respond to the current market and new opportunities we have also reshuffled our UK Leadership team, offering larger and broader opportunities recognising the value of this to our customers as well as internal population. Personally, I am delighted to be working with such an inspiring and talented group of individuals and in a world where the only constant is change, we feel stronger than ever to be able to support our customers over the coming years.

Job trends over the last 12 months

By Gareth Evans – Group COO

Job analysts must be scratching their heads at the moment. The market in the last two years has presented its own twists and turns and been hard to predict as illustrated by the graph below, showing directly advertised HR, Reward and Payroll roles since the beginning of the 2021/22 financial year.

Whilst you will hear much talk of a potentially looming recession, I’m pleased to say that we have started the new financial year with a bang, buoyed by a 201% increase on a tough 2021/22 Covid year, with 38 new starters joining Oakleaf Group last year, and 22 hires made already since April. We have launched our Future Talent Scheme, with 15 talented individuals chasing their potential in two groups run so far. We cemented our commitment to the City, moving into fantastic offices at No.1 Poultry, offering our colleagues an enviable City location within a hybrid pattern offering up to four days working from home.  Growth, mitigated with preparation for a still uncertain market, is very much on the agenda.

Brexit (remember that?) sowed the first seeds of volatility in the job market before Covid, furlough, the subsequent war for talent and rush to return to work (flexibly) reaped fields filled with considerable hiring challenges. Roles have evolved. Everyone wanted change specialists initially, we then saw an unprecedented demand for recruiters, which made up over a third of our total job portfolio in February. Now it seems the demand for multiskilled HR Business Partners and Generalists is on the up again, reaching its highest level for a year in May.

From the start of our financial year in April, we’ve seen an increase in the number of HR, Reward and Payroll roles at a more junior (up to £60k salary level), currently making up 54% of our overall portfolio, as opposed to 42% in December 2021. Numbers of senior to mid-market level roles seem to have fluctuated by comparison, making up 46% of our job portfolio in January, dropping to 32% in March and have steadily increased since April, currently sitting at circa 38%.

The desire for specialist talent is very much on the rise, particularly in our Reward, MI & Analytics division, while the consistent desire to work flexibly and as part of an increasingly diverse workforce has led to a surge in roles across Diversity, Inclusion, Engagement and Wellbeing.

Our clients are rightly keen to understand how we ensure sourcing from and supply of a diverse talent pool. I’m pleased to say we have made real strides in this space, with a growing internal E,D&I Focus Group , Women in Leadership and Proud HR talent communities successfully established. A client new to Oakleaf recently passed on several exclusive roles on the strength of our work in the E,D&I space, marking continued progress we’re delighted with.

Executive Insights

By Emma Castillo – Director – Oakleaf Executive

The first 6 months of 2022 have been extremely busy in the HR search market.  We have successfully completed CPO and HR Director searches across multiple sectors.  This has included Banking, Insurance, Investment Management, Professional Services, Healthcare and Tech / FinTech.  We have seen multiple mandates within Talent Acquisition across all sectors.  This is an area that has also been particularly talent short.

At the senior / executive end of the market we are predicting that the remainder of 2022 will remain strong but with a little more caution than we have seen in the first 6 months of the year. This is in part due to factors in the wider economy but candidate pipeline remains strong, particularly amongst HR Directors. These factors will continue to drive the market further.  

There is also demand within smaller organisations looking to hire their first CPO / HR Director to support the growth strategy.  This is across multiple sectors such as Technology and Finance but also in Private Equity backed growth markets such as Renewable Energy and Leisure.  We also predict organisations will look for candidates with specialist skillsets such as Transformation and M&A.

Commerce & Industry Insights

By Alice Hamp – Senior Manager – Commerce & Industry

Our Commerce and Industry division has continued to see brilliant growth since last year and the passing of COVID-19 related uncertainty. All our markets are significantly up year on year in terms of new vacancies coming in and average salaries. Trading in Q1 of the financial year 22-23 is up 63% on the same period the year before!

The Tech and Media market has not quietened since the boom post-covid. We are still seeing huge investments into internal TA teams, as well as exciting new tech ventures allowing for meaty Generalist roles to truly partner with Founders/leadership to create forward-thinking People strategies. It is great to see HR becoming one of the first integral leadership hires in start-ups, it shows that HR is no longer seen as a “personnel” department, but a function that can truly make an impact. We anticipate that with the uncertainty of the next few months we will see hiring slow in the Tech market, however we are yet to see this happen.

The Not for Profit sector has seen real improvement with market stability leading to increased movement at higher levels. In 2021 we saw most vacancies at the Admin & Advisor levels however our portfolio of HR jobs is now back to over 50% being in the mid-senior range. Great news for our value driven clients and demonstrates how these organisations are investing heavily in their people agendas.

Our Industry and Science team have been incredibly busy across both our large corporate and SME client base. In our larger clients, Talent Development/Management is a key focus with major investment across most of our FTSE250 & FTSE 100 clients. In our SME client base, Talent Acquisition remains the main focus.

And lastly, we are seeing some fantastic growth in the Consumer space. This sector was particularly heavily hit by the last few years with most retailers/hospitality venues going through periods of furlough, but we are quickly getting back to speed. Average job flow was increased 300% since the start of 2022 and the seniority of the vacancies on the market is increasing too. Exciting times ahead!

Across all sectors, perm hiring continues to be the focus with over 70% of our work on that side. However, the interim market is definitely bouncing back. Interim recruiter roles are a clear area of focus however we are also seeing exciting M&A activity across the FMCG and I&S space. Large, international change pieces are coming back online and our interim specialists already have their teeth into some really interesting projects!

Financial Services Insights

By Sarah Alexander – Director – Financial & Professional Services

After a quite incredible previous financial year, with job volumes climbing over 300% during the course of the year, in the last quarter the HR market in financial services has remained steady.  In some respects we are seeing more of everything; more intentional moves and subsequent backfills, more senior moves, more wage inflation… The latter has characterised both the interim and permanent markets at all levels, with expectations and offers both sitting a full grade above where they have previously. In the most extreme example, this looked like a permanent VP level candidate obtaining a 50% increase in base salary! Attraction and retention are equally as challenging, with significant counter offers and multiple external processes still being the norm for top talent.

In more recent weeks, the balance of opportunities has finally shifted away from talent acquisition, toward HR business partnering and complemented by a new stream of brand / communications focused roles. There is still very much appetite to hire in general but processes are taking slightly longer and roles are typically replacements rather than new headcount. Interim market continues to rebuild post Covid, although the focus on FTC in core HR roles remains. Security for interim candidates and clients alike is paramount, given the number and diversity of permanent opportunities available – we have seen this play out in retention bonuses being factored into day rates. The market for entry level talent is  active, with an understandable increase in both early careers and experience hire support roles off the back of both corporate headcount growth and the expansion of TA teams in the last year. Clients are sensitive to economic forecasts but continue to sign off nearly all hiring needs. Whilst asset & investment management, private equity and insurance remain key markets, there is no one vertical significantly less busy than any others. Long may it continue!

Reward  &  Analytics Insights

By Sam Clark – Director – Reward, Analytics & Payroll

Reward, HR analytics and HR Systems were some of the hardest hit areas within HR during the pandemic when businesses were firefighting, HR tech transformation were put on the back burner and Reward teams battled through compensation reviews light on resource. To go into 2021/22 financial year and experience such an incredible bounce back shows the resilience of the Reward market; we have seen record vacancy numbers from within our new and existing network, newly created positions and expanding teams to account for additional workload. The war for talent has been very evident and salary inflation has been felt across the market especially in the interim space which has been particularly under pressure. Executive compensation remains busy and the consultancies have been hiring reward talent in droves to react to customer demand. We have seen exponential demand for Reward talent across technology businesses, who are making senior level but also manager and analyst level hires to support their growth and future IPO plans.

Their agility in decision making is allowing them to successfully land top talent, especially in the interim market where they can navigate IR35 impacts more easily. The HRIS and HR analytics space has been busy as businesses are reviewing their systems capabilities and investing in HR technology with new FY year budgets.

We are beginning to see signs of the market plateauing a little in the last few weeks and we feel that the frustration from candidates who are in processes that seem to have stalled a little. We expect this across summer months, though whether this has been exacerbated by the global economic situation remains to be seen. We are predicting a strong end of year as we come into September /October. We have welcomed  such a great variety of hiring across levels and technical areas with clients coming to us with very diverse requirements. We anticipate that technology, pharmaceutical and the banks will continue investing in Reward talent to ensure they are attracting and retaining talent. We also anticipate a focus on hiring for EMEA and global roles due to expansion into new regions and harmonisation work following M&A activity.

UK Regions Insights

By Gavin Jones – Director – Regions

Our businesses outside of London have gone through enormous growth and change over the past 12 months. We have opened a new office in Manchester, following the demand we have seen from our customers there. Since doing so, we  have been overwhelmed with an outpouring of positivity from the HR community, in the North West, but also further north into Newcastle and Scotland. Our Midlands business continues to thrive as does our Thames Valley operation. As I look back on the past 12 months, we noticed a consistent trend amongst type of roles registered as organisations grappled with the changing economic landscape.

Initially from around March time last year we saw a huge demand for Talent Acquisition candidates which some 15 months later is still incredibly strong, (although not as fervent as it was). This was followed by a surge in Reward roles before L&D and OD. We saw generalist roles return to be the most commonly registered role for us before Christmas.

Prior to the current economic climate, the demand for talent caused there to be pressure on salaries offered, and we saw wage inflation at varying degrees, across all sectors and industries. We have seen organisations look to reach beyond their head offices to their wider office locations, in an attempt to expand the pools in which they were attracting talent. At its peak we would see organisations where they had to insist on 5 days per week working in office, struggling to attract the best talent in the market. Whilst we have started to see some organisations start to bring people back into the office slightly more, hybrid working will be here to stay. I think in some ways an unfortunate consequence of this clamour for remote work, is the impact on people at the start of their careers. We have actually seen a large number of candidates, themselves at the start of their careers, wanting to work totally remotely, and I can’t help but think they will miss some elements of development as a result.

Looking ahead we have a potentially challenging macro environment to navigate. Should the UK tip into recession for a period of time we can expect to see an increase in demand for fixed term contract and interim positions. From a regional point of view however, I do think that we will continue to see businesses looking at the HR talent pool as a UK wide population, meaning more opportunities than before, as businesses look to offset some of their wage inflation. I expect to see greater fluidity between verticals, and an open mindedness emerge amongst organisations as to the background experience of potential applicants. Whatever the challenges that await us over the next 12 months I am confident that the HR community will rise to it, and their employers will benefit from their counsel.

Professional Services Insights

By Sarah Alexander – Director – Financial & Professional Services

The last 6 months in the professional services market have seen continued acceleration both in terms of job volumes but also talent returning to the market across all disciplines. We are seeing strategic restructuring of HR and talent acquisition teams, which is creating new and exciting opportunities and also some very significant senior moves, where HR leaders have been embedded in their previous firms for a number of years, now taking the plunge and moving both into ‘step up’ roles and into the contracting market. In the mid to senior management community, there remains strong demand for ED&I specialists, quite often stepping into newly created roles, and we don’t anticipate this demand slowing. Learning and talent transformation is happening across the market as firms embrace new technologies to help create cutting edge learner journeys and experiences. Talent Acquisition remains the dominant vertical with 40% of all our mandates this year being in the TA space! Whilst this currently feels slightly less pressurised than during last year, this looks as if it will continue to be a theme in the medium term.

The junior to mid-level market remains strong in terms of demand but tight in terms of candidate flow as firms compete hard for top talent who have relevant sector knowledge. Agile working patterns and flexible working offerings will doubtless remain a key consideration for candidates at all levels, with salaries needing to increase to compensate where more time in the office is required than the market average (2-3 days) and thus higher travel costs are incurred. We continue to work closely with our colleagues outside of London as more and more opportunities are coming to market in national firms with the option to work from any of their different offices across the UK – this looks set to be a permanent shift.

Payroll Insights

By Sam Clark – Director – Reward, Analytics & Payroll

The payroll market has been an interesting place over the last year and we have seen it at its most buoyant with hiring at all levels and across the breadth of financial services, professional services and commerce and industry businesses. It has been positive to see newly created positions in the market which are typically to support the influx of new projects in the systems and implementation space and expansion into new territories internationally. As a result of this, salary inflation has been particularly prevalent as businesses are trying to hire top EMEA and international payroll talent in an already talent short market. We have also seen a lot of hiring for short term 6 months contracts to bolster teams during busy periods from a business-as-usual perspective and accountancy bureau and in-house teams have been actively hiring to reflect increased demand. 

Total Rewards Search Insights

By Jamie Newton – Managing Director – Total Rewards Search

The last 12 months for TRS have been an absolute whirlwind of growth and expansion, as our US offering has really gained momentum.  Revenues are up over 200% year on year and we have grown the team significantly with new dedicated hubs in North Carolina, Philadelphia, and Miami; all operating alongside our New York HQ which has seen a huge increase in search volumes over 2021/22.  Our niche offering has really taken hold across the East Coast and we are now seeing a notable increase in search activity within Texas as well, which is pleasing.  Finally our UK based colleagues following the end of the US Travel Ban were able to resume their monthly travel to New York from November last year, and it has been fantastic getting in front of our clients and being able to enjoy their company.

The US Compensation & Benefits market continues to move forward, in spite of broader economic concerns and firms keeping an ever-watchful eye on the situation within Europe.  Getting through the first (post pandemic) Comp round did see market activity dip in the latter part of 2021 but February 2022 onwards saw search volumes double across the team in a short space of time.  Interestingly the real focus seemed to be across financial services, with a number of large banking institutions, hedge funds, and alt shops who all looked to make significant top level hires in the early part of the year.  This movement has really created a buzz across the NY market with key hires creating noticeable talent gaps that just aren’t easily replaceable. Talent in this field, particularly those that understand the complex compensation vehicles like carried interest and co-investment, remains incredibly sparse with clients having to think about alternative hiring solutions from finance functions or the consulting firms.  The other area of genuine concern for firms across the East Coast is executive compensation.  Interestingly movement in this discipline remains limited, however the number of searches out in the market and that we have managed at TRS over the last 6 months is truly alarming.  Many of these are first time Exec Comp positions for firms needing a specialist as they look to move towards IPO and others are notable upgrades or carve out hires of established firms who are looking to re structure how they approach executive compensation.  The talent pool in this market is incredibly sparse with a real reticence to move for individuals in secure roles in established organisations.  The furore around tech and fin tech firms hiring big and going public has definitely quietened down across New York, North Carolina, and Texas as we enter a new phase in the global economy.  It does feel that candidates are starting to lean towards larger more secure organisations when assessing future moves following a swathe of cutbacks and share price capitulation across a number of high profile tech organisations.

 TRS is set to double in size again for this financial year as we are fortunate to work in vital niche that remains very resilient to external global factors, and long may that continue!

Technology, Change & Transformation

By Chris Jones – Managing Director

The market has seen a positive resurgence over the past 12 months with clients looking to add diverse talent to their teams whilst maintaining profitability throughout their projects. In terms of where the market is heading Data in the form of Engineers, Scientists and Analysts continue to be a hotbed of sought after talent within the market due to the increasing efforts of organisations looking to make better business decisions. After what was a quiet period during Covid now more than ever we are seeing clients looking to be positive in their hiring within Technology, Change and Transformation projects as they try to bolster their already growing teams with more talent from both a contingent and a permanent perspective. More so than ever it seems that EDI is on the lips of everyone with organisations looking to attract and retain diverse talent in an overly competitive market place. 

Initiatives and specific focus have been implemented across multiple clients and sectors to address this issue on what is a learning journey for most. Long may that continue so we all regardless of race, background or gender feel included in the workplace.

Equality, Diversity & Inclusion

By Angela Lavery – ED&I Lead

Oakleaf are immensely proud of the steps we are taking within Equality, Diversity & Inclusion and one of these is working with Clear Assured, having achieved our Bronze certification in January.

 We will continue to promote change over 2022 by completing tasks to achieve our Silver Certificate, and building on our awareness and knowledge of our policies and processes and making these altogether more inclusive. Using feedback from our monthly ED&I meetings, we will be focussing on neurodiversity & mental health in our workplace, and looking at how we can support our employees better in this area. Reasonable adjustments will be made where required and we will strive to make our workplace one where everyone can do their job, without judgment and be themselves.

Oakleaf have also signed up and are committed to the “10,000 Black Interns” initiative. Our internal “Women in Leadership” group will continue to question inequality and support gender imbalance by planning and implementing on their findings and ideas, to empower women in our workplace.