The bellwether of the Scottish economy is our specialist recruitment sector. Those students of the ‘talent market place’ can divine a great deal about the state of the nation by the kind of jobs on offer. And while the days of the circus animals in the big top might be over – there is still a need for ‘the trapeze artist’.
These are a special group of high-wire contractors who swing from one job into another without touching the ground or falling into the safety net. Steve McCutcheon, the founder and chief executive of PRG, one of Scotland’s most successful recruitment firms, says the ‘trapeze artist’ is a sought after individual working on change programmes, especially in financial IT or oil and gas.
“In the contract market, we will place people several times over many years. It also applies to the permanent market, but not as frequently. For contractors, it is typically a six month to a year-long project or programme. When we know a contract is coming to an end we help to line up the bar, so they swing into another position. You could call them ‘trapeze artists’.”
PRG, with offices in Glasgow – a refurbished town-house in West George Street – and Edinburgh, has been around the block and understands the dynamics of finding and retaining people in the depths of a slowdown.
“Our experience was that in 2008 we started to see things slowing down,” says McCutcheon. “We made some changes internally to deal with that. We are still recovering. In 2008 we stopped growing as a business. Since we started in 2002, we had grown fast – and pretty steadily. Then, from 2008 until 2012, we were pretty flat and managed not to shrink,” he says.
For a recruitment firm working in financial service, the banking collapse could well have been the death knell of the business. Permanent recruitment by the banks during the dark days of the collapse fell off a cliff, yet there was still an active contract market, keeping a trickle of income coming in.
“Inside the banks there was a focus of reducing permanent recruitment – or the spending on permanent recruitment – but specialists in risk management and regulatory issues were a hot ticket.”
In 2012, it was PRG’s tenth anniversary and the privately-owned company took a moment to reflect on where it was going.
“We thought that we saw the market improving with investors coming in and decisions being made. So we made investment decisions of our own. It was a simple strategy: to grow our historic core businesses and enter some new markets that were complementary. We were in accounting, finance and business change, so we moved into the sphere of business and financial IT. Historically, this was something we didn’t do. Yet this was an obvious opportunity for us, so we invested in our IT practice.”
The strategy was to grow the existing business, and enter new practice areas where there was not such an obvious footprint, but in sectors that were doing well. “We recruit people who – relative to the job market – are high-scaled, high-knowledge and relatively highly-paid. Therefore, there is good opportunity for us to add value to the client, it’s not just a commodity and transactional type of relationship. We can help companies add value by the selection of key people. This was an opportunity for us.”
PRG has worked with the biggest financial service corporates in Scotland, such as Lloyds Banking Group, with its Bank of Scotland operation, Standard Life, Aegon, Barclays and Clydesdale Bank and Ignis Investment (now part of Standard Life Investments).
“There is barely a household name in financial services in Scotland that isn’t a good client of ours. We are doing more business than ever – but as we’ve grown this has become a smaller proportion. We are doing more business across a broader range of sectors.”
“In very large businesses, there was a big finance department and big IT departments. What we’ve seen is big finance functions more involved with business drivers, and they have been looking at cost savings and efficiencies.
“This leads to a lot of programmes and projects which are now under the banner of ‘business change’. This has become a discrete specialist function, where key people are involved in executing change programmes.” He says this expansion has been driven by increasing regulations, governance and risk management – especially the requirements of the Financial Conduct Authority, the Prudential Regulation Authority and the wider demand of Basel III and capital ratios.
“A significant amount of this change has had a major component of IT solutions – and this is about storing big data for regulatory purposes. Business change and IT work very closely together on this.”
Salary scales are also rising again for key individuals. “As hiring activity has increased, candidates are choosing to move jobs. There has been a shift in favour of finding the best talent and that has led to a shift in salaries. This is supply and demand in action.”
A candidate with 20 years’ experience in IT projects within financial services joining a new banking outfit can earn £100,000 a year.
“There is a difference between permanent and contactor. Contractors typically earn more because relatively speaking they have a more insecure position. Those guys can earn from £450 a day up to £1,500 a day in both Glasgow and Edinburgh. On the permanent side, people earn less. But someone with 20 years’ experience with business change and project management in a technology function, then they can earn six figures. That’s a reasonable salary scale.”PRG are not active in the new graduate market.
“It is unusual for us to recruit new graduates. Young people might be good academically but they don’t have work experience. Our clients want people with skills and knowledge.” Is this changing as tech-literate graduates who have grown up with social media are coming out of university and college?
“There is no doubt the whole digital space is huge and we do a lot of work in that area. But our clients want experience in the workplace on business projects. They might well bring in entry-level people as well to join the teams, but that’s not our focus.”
PRG’s finance business is predominantly people who are based in Scotland. Less than 10% come from England and overseas. However, PRG’s expanding oil and gas practice is the flip-side, with almost 70% foreign nationals, people from England or Scots who have spent their working lives overseas. The IT practice is bringing people from all over the world, and India is a big source for us.”
Is Steve McCutcheon concerned about the influx of recruitment websites and the growing significance of Linkedin?
“I spoke to a client last week and they put an advert on S1.jobs and received more than 400 responses. The right thing to do is to consider each of those and reply to everyone. This might be a ‘Thank you for your interest, but we are not going to take you forward’.
This is very time consuming. I see our job as a recruiter as giving our clients what they need, and that’s not always what they want.”
He says sometimes a client’s specific wish-list does not match how much they are willing to pay – and they have to adapt their expectations.
“It might be what they want, but perhaps not what they need and it might not even be achievable. Our role is to ask, are all of your requirements really essential for what you are trying to achieve? If the client insists that’s fine, we can say ‘we can get all of this for you, but you will have to increase your budget’. Once it is agreed, our role is managing the process and presenting the candidates.”
The high-end recruitment sector is buoyant in Scotland with firms such as PRG able to make decent profits.
In Scotland’s job circus, people like Steve McCutcheon are the ringmasters. Steve repeats PRG’s mantra that it is about ‘adding value’, finding people for clients with ten years’ worth of experience and problem solving with personal skills who have delivered successful outcomes.
“This is our track record and that’s what clients want from us.”
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