Media: Leasing Life, Issue 140
Date: May 2005
Article: Recruitment - Looking for 'the right stuff'
Author: Michael Imeson on behalf of Leasing Life
For anyone thinking of changing jobs because they want a greater career challenge, need more money or don’t like their boss, then there are countless opportunities in the UK leasing and asset finance sector…for the “right” candidate.
What constitutes the right candidate? Well, they don’t have to have the intellectual, motivational and physical qualities of a test pilot or astronaut, as typified in the Hollywood film The Right Stuff. But if they work in sales or business development, have two to five years’ experience in asset finance and have been “classically trained” by one of the big bank-based lessors, then there are plenty of jobs they could walk into tomorrow. Demand for people who fit that description far outstrips supply.
This is partly because good revenue-generators are always hard to find, partly because these people are being feted by their current employers, and partly because the leasing and asset finance companies, despite a few “local difficulties” are benefiting from a buoyant economy.
That doesn’t mean everyone else is the “wrong” candidate; rather that demand and supply are more evenly matched in the rest of the jobs market. There are vacancies for people of all ages, in all kinds of roles, at all levels of experience and with varying standards of training and education.
For people over 50, in a senior position on a high salary - or, at the other end of the scale, working in a back office pushing paper clips – opportunities are relatively limited. They’re not exactly on the scrap heap yet, but if they want to move jobs there won’t be as many vacancies as there are for thrusting Young Turks looking to make some money and a big impression on the world.
Leasing Life contacted a number of recruitment specialists in the leasing and asset finance sector to see what sort of people employers are looking for and what is happening in the jobs market.
What are these terms? “Obviously salary, but also the place of work, the lifestyle and career potential,” he says.
Other factors are pension entitlements and other benefits, as well as the level of risk – some people are risk averse, but others actively seek out risk and the rewards that it brings.
“Employers can attract the right candidates by positioning themselves as ‘employers of choice’. This means doing things like opening up positions to internal applicants, creating a happy and productive workplace environment and providing uncapped earnings potential for talented sales people.
He believes 2005 is likely to be a year of growth for the asset finance industry. “You can increase profits by either cutting costs or increasing sales. The last couple of years have seen a concentration on costs, but now companies seem to be pursuing sales, he said.
The company has around 50 clients - including most of the major banks and their asset finance subsidiaries, independent lessors, contract hire companies and some of the largest brokers - and at any one time it has about 1000 candidates on its database. Some 80 per cent of these candidates are in sales, or are board directors. In other words they are “income generators who pay for themselves” and are the people who are most in demand and hardest to get.
He continues that he has detected no appreciable change in fee charges in the five years since he has been in business. This means recruitment specialists’ income has mirrored the rising salaries of the people they recruit.
“For example, the IT sector seems to be recovering with manufacturers improving their sales, and this is driving more leasing volumes. This in turn is translating into a need for more leasing salespeople, but not uniformly across Europe. This had led to sporadic rounds of frenzied recruitment activity.”
All leasing sectors have had a handful of relatively senior positions floating around recently, but the trend continues to be that most vacancies are at much lower levels, notes Porter. There is a distinct mismatch in the market - senior people are open-minded about changing jobs but there are not so many vacancies, while people at junior levels are less likely to want to change jobs even though there are numerous vacancies for high calibre applicants.
“Persuading people to move is therefore the big issue facing recruiters, and this is likely to continue for as long as the outlook in certain sectors remains unclear,” Porter said.
“This imbalance is evidenced by talk that one senior European role advertised recently attracted more than 100 CV submissions from recruiters. This highlights not only the number of senior individuals prepared to move, but also the dearth of opportunities.”
Because there are plenty of vacancies at junior levels for high quality people, many highly experienced, senior executives are asking recruiters to put them forward for roles that are significantly below their capabilities.
Lack of good candidates
One reason for the dearth of “middle bracket” experienced candidates is that graduate training has all but dried up. “The bank-owned leasing companies got tired of their trainees being poached after two to three years of expensive training, and so largely stopped training,” he says. “In addition, many graduates regard the industry as unexciting, so activity on the supply side is slow, too.”
Agencies’ fees can come under pressure as a result, and percentages can be pushed downwards. “What often happens is that a client will instruct, say, four agencies to find a candidate,” he says. “If there is a shortage of the right sort of candidate, two or three of those agencies will end up putting forward the same person. The client then tends to favour the agency with the lowest fees, and still gets the same high-calibre employee.”
He adds that when it comes to recruiting outside this middle bracket of youngish, experienced people, younger candidates tend to be preferred over older ones for the following reasons: lower salary expectations, eagerness to please, preparedness to work longer hours and because they are generally more dynamic, ambitious and motivated.
As for mature people - those over 45 or 50 - looking for jobs, they often expect higher salaries which employers are not willing to pay. There is also still the perception that older people are not as willing to work as hard, or for as long, as their younger colleagues. Consequently, older people find it harder to get jobs.
“Nevertheless, older people are often preferred over their younger competitors for their experience, and the fact that their children are grown up and so they won’t be taking time off for maternity and paternity leave, or to look after sick kids,” he says.
Age is not important
Theobald does not subscribe to the theory that age is a hindrance or a benefit for candidates. “We are often asked the question whether age is a contributing factor in the selection process,” she says. “The simple answer is ‘no’ as credible track records and employment histories tend to dictate suitability.
“The only exception to this rule may be the recruiting company culture whereby a migration towards ‘new thinking’ and fresh ideas is favoured. It can also be frustrating for the seasoned candidate as vacancies for senior positions have diminished due to fewer leasing companies and flatter hierarchies.”
When clients are looking for more generic skills, New Leaf Search will source candidates outside the leasing industry, provided the candidates have skills that they believe are transferable.
The 9/11 effect is over
“New companies were being established and wanting to expand rapidly. Our candidates could easily have three or four offers on the table, especially if they were in sales. Then, after September 11, 2001, companies battened down the hatches for about two years, and this had a major effect on recruitment, especially in American-owned companies".
“But in the past two years it has picked up and 2004 was our busiest in five years. This reflects a return to buoyancy in the market. There’s a general consensus that we’re in better times and I’d say around 75 per cent of companies are recruiting. I think this year will be better than 2005.There is a much greater breadth of companies recruiting.”
The sorts of candidates much in demand are sales (especially for people with IT finance experience) and credit, which is putting upward pressure on salaries.
The internet is now a valuable advertising medium. All agencies have corporate web sites promoting their services to clients and advertising positions to candidates.
Although the Government is trying to encourage employers not to be ageist and keep people on well into their sixties, the reality is that many employers prefer to recruit people under 45 or 40, especially for sales roles. However, this recruiter does not think ageism is rife. “I have never worked with ageist consultants and wherever possible a good consultant will try to widen the net by putting forward older candidates.”
“I have known clients preferring someone in their 30s to older people. But I have also known some who want a more mature person who can deliver experience and gravitas.”
He thinks people are discriminated against because of age, but it works both ways, against young as well as old. In sales and business development in particular where the common perception may be that younger people are more dynamic and hungry for success. However, the main reason for their being chosen over older competitors in the jobs market might be that they fit into the team better - in terms of having the same lifestyles and interests - if that team is already young.
They will recruit from outside the industry where appropriate. “New businesses want people with asset finance experience who can hit the ground running,” he said. “Established medium-size and larger businesses usually have enough in-house experience to give them the flexibility to take candidates from outside, such as people who have worked for banks, or for firms selling leased goods such as computers, photocopiers, plant and equipment.”
Confidence has improved
“We have noticed a shift in business in the last year to 18 months,” he says. “Credit and risk jobs were in demand, but sales jobs were not. Now it has been tipped on its head, with front office roles, including sales, more in demand. There’s more confidence from clients and they are adding to their teams, not just replacing people who leave.”
Webster recruits from board level down to sales support administration, in the small and middle ticket market. He used to work for Charterfield Executive Search, an asset finance specialist bought by Hanover a year ago.
“The hardest candidates to find are the ones who are happy and successful in their job,” he says. “There are a lot of candidates in the market due to redundancies and mergers, but finding good ones is difficult.
“Those most in demand are sales or business development people, with three to five years experience and still in their first or second job. They tend to be the most motivated and ‘hungry’. Their salaries are not too high and they are on the way up in their career.”
Older people can still find work. “It’s down to the outlook of the company as to how important age is. If the sales team is run by a man or woman in their mid-30s with a team slightly younger, they will try to match the age of their team. But if the sales director is in his 50s, he may want an older person. There are two types of sales team - the old school and the new guard. It gets more difficult to find work if you are over 50, but there are more opportunities in short-term contract work.”
A big change in the industry affecting recruitment is the Basel II capital accord, which comes into effect next year, says Webster. It is creating a universal need for better asset management to safeguard residual values. That will raise the importance of asset management and create more jobs in that area for experienced managers.
Invoice finance and banking
They recruit staff at all levels of seniority in the leasing and asset finance (small and medium ticket), invoice finance and, more recently, banking industries.
“This skills gap is not just happening in leasing, but in invoice finance and banking too. It means that when a valued employee resigns, companies are more likely to make counter offers to retain them, often as much as £4000 or £5000 on top of basic salary.
“Sales, business development and IT finance people are in the shortest supply. Credit underwriting and operational people are among the easiest to find. Consequently, we’re having to massively increase our advertising spend. It’s also as important as ever to treat candidates well, and we get them to refer their colleagues to us.”
The shortage of good staff is exacerbated by the fact that banks and factoring companies are moving into lessors’ territory and poaching the best people. “We may well see this happen the other way around if the skills shortage persists.”
With so many sales jobs available paying good salaries and commissions, staff with non-sales backgrounds are sometimes tempted to apply. This can work, but not often.
“Sales people are a special breed. We do get people from credit or operations who can’t find a job in their chosen area who decide to try sales, but they don’t usually make it. To succeed in sales you need to be resilient, to be able to take the knocks and keep getting up time after time. It’s a high reward but high risk role.”
The solution to the staff shortage doesn’t lie overseas either. Polish doctors, Czech dentists and Australian barmaids might be flooding into the country, but whereas bodies, teeth and beer pumps look the same throughout the world, leasing companies do not.
“To be successful in leasing requires a good knowledge of that country’s particular culture, people and language.” That said, the recruiter currently has a German woman on its books for whom a relationship management role in the UK will probably be found.
“Bloodied in leasing”
“There’s a definite hunger to capture those sorts of individuals. There are also vacancies at the lower end for less skilled people at the £20-£25,000 salary level. There is less demand for senior people and although there is strong demand from “one or two major global organisations” this is not typical.
He says the leasing and asset finance market in general, and recruitment into it in particular, is frenetic and unpredictable at present. “If there is a trend, it is that there is no trend,” he says. “I worked in the leasing industry for 16 years before moving into recruitment, and I don’t think I have ever seen a market like this. There’s a total lack of predictability. Some companies are busy, others are not.”
Employers’ attitudes to salaries illustrate this point. They may not pay the earth, but once a key person hands in their notice, the employer will sometimes take drastic steps to retain them. “There have been three cases in the last two months that I know of where individuals have got job offers elsewhere and the existing employers have come back and blown those offers away." In one instance, the lucky person doubled their salary from £50,000 to £100,000 without having to move.
“The old lady”
She joined Hewitts only last December, but ran her own recruitment business for years. “I’ve placed many trainees who went on to become managing directors and chief executives, and they’ve come back to me when they were looking to move again,” she says. A quarter of a century ago it was “easy” to recruit because it was a growing industry and clients were less fussy about candidates.
“If the candidate had a good education, looked like a banker and could open and close a deal, that’s all clients were looking for,” says Rodgers. “It was a ratecard industry then.” Over the years it got tougher, and as new types of finance were introduced - such as vendor leasing and operating leases - clients wanted people with experience in those areas, which made it harder to find the right recruits. Then the industry shrank, which reduced vacancies.
“Now there are lots of vacancies but very few suitable candidates,” she says. “Clients want exactly what they say they want, and are not very flexible, with the exception of Bank of Scotland Asset Finance and Lombard, who will take less experienced people and train them.”
Rodgers believes that lessors are going to have to take on people without asset finance experience, but who have “personality, potential and education, and spend three to four weeks training them”. There is little sign of this happening yet.
“I know employers who would rather leave a position open for six months than take someone on and train them. This means they are stretching their other staff. Well, it’s wakeup time. They should spend the money and start training their own,” she says. “Having said that, we have well exceeded our first quarter targets”.
“Now that big-ticket leasing is not tax-based anymore, there’s merger mania in the big banks’ leasing divisions and they’re not recruiting much,” he says. “It’s been like this for the past four or five years, and that’s been the most fundamental change in this sector of the asset finance industry.”
Andersons recruits front office (sales and marketing) and middle office (operational and support) staff at senior, middle and junior management levels, and has an office in Geneva. Clients include the big UK banks such as Lloyds TSB and Barclays, most of the German banks and Australian banks and American organisations such as GE Capital and Citibank.
Gooch estimates there are about 40 per cent fewer job vacancies in big-ticket leasing than they were four years ago, brought about predominantly by the global harmonisation of tax and accounting regulations.
“It will improve in the future,” he says. “Companies need aircraft, ships and other big-ticket items and will need to finance them one way or other. But with tax-based leasing out of the window because of the tax harmonisation that has been happening globally, operating leases will be favoured over finance leases.”
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