GUEST COMMENT: Expect 2011 to be a good, but not great, year for Scottish financial services recruitment

Scotland's financial services industry has had a topsy turvy ride over the last few years, to the point where it's become increasingly difficult to predict how the economy - and the hiring and firing trends - will develop.

But, as the industry employs nearly 100,000 people in Scotland, and is hugely important to the economy as a whole, it's important to track this. Over the last ten years, we've been surveying some of the biggest companies in the sector to find out what exactly their hiring intentions are for the coming year and have witnessed the highs and the lows.

In 2011, the signs are looking promising. Nearly 80% of our respondents were either optimistic or very optimistic about their company's level of business confidence for the coming year and no firms were pessimistic. In itself, this doesn't signal huge amounts of recruitment, but the last time results like this were recorded was in 2003 - right before the last boom years.

So, what can we expect from recruitment this year in the Scottish financial services industry? It's positive, but still not bullish, with 45% of responding companies expecting to increase headcount this year and 75% of this proportion putting this down to business growth. And of those looking to hire, the median anticipated rise in staff numbers was 15% - or equivalent to 600 new roles.

Encouragingly, much of this recruitment is expected to be at the trainee level - which I am sure will be a welcome relief to those graduating this year or candidates with only a few months' of financial services experience who are keen to climb the career ladder.

Competition is expected to be fierce, however. More people are actively looking to move jobs after a period of staying put, and candidates will need to make every effort to stand out. Organisations are receiving at least 27 applications per vacancy, and 85% say that they are finding it difficult to recruit staff of the right calibre.

However, since over a third of firms say their current staffing levels are too lean to manage a significant increase in business volumes, you can expect the average time to hire (which is currently at 6 weeks) to speed up.

In addition, firms may start to become a little more flexible if retention issues continue to increase. According to our survey staff turnover figures have risen to 9% and a quarter of respondents indicated retention problems in 2010. Of those companies who did experience difficulty, mid-ranking employees were cited as the hardest to retain. So this could be one of the first areas to see some faster, more flexible hiring decisions over time.

If you are moving on then bear in mind that while salaries are recovering, the packages being offered are still a little way off the highs of previous years. According to our survey, directors, team leaders, team members and trainees received 1-2% more last year with managers enjoying the strongest increases at 3-5%. However, pay predictions for 2011 remain cautious at 1-2% more for all levels.

There's always a premium for switching jobs, but candidates should be aware that there's no return to the blank cheque book days of old.

Margaret Dyer is director of Joslin Rowe in Scotland, which has just released its 2011 Scottish Financial Services Recruitment Review