It is clear to everyone that the accentuated pattern of change which began in Retail Banking in 2008 has continued now into its third year in 2011. Concerns over the future of London as a competitive global financial services centre seem to be unfounded as it still ranks as number 1 in the GFCI survey March 2011 and City Jobs were at its highest for two years at end of Q1 2011.

The demand for high quality interim staff has been felt across the UK with key centres outside London including the South West, North East and North West as well as Scotland. Whilst demand levels have not changed the requirements have shifted to a need for specialist staff and middle-senior management level opposed to more general requirement for project managers able to implement agreed change.

Transformation across the Irish Banks has also driven demands for Interim executives with experience of UK Banks after the credit crunch to assist with the change and transition needed.

Focus still remains high on change driven by a changed regulatory landscape and increased focused on liquidity in programmes such as Basel and Solvency 2. For those of us that remember the mis-selling of Endowments and the resource hungry projects created to assess and compensate consumers, PPI is now driving similar demands with estimated numbers up of to 16000+ additional temporary and interim resources required to manage the exercise.

• Statistics from Interim Partners show demand for generic project managers to implement business and IT change ( projects valued £1-5m) declined by 12% against the last two quarters 2010.
• Demand for Project and Programme Managers / Directors with the content expertise in areas such as compliance, risk, integration, operational transformation in wholesale and retail banking grew by 39% against the same period last year.
• Demand for Subject Matter experts in Risk, Compliance and Credit have risen dramatically – 61% up on last 2 quarters 2010.
• Demand for Interims in professional areas such as HR and Finance have remained static and in areas such as Marketing have declined by 21 %.

Areas outside London have had difficulty attracting candidates and frequently rates have been higher to reflect the need for expenses. This has been the case in particular, in very specialist areas such as compliance where numbers of good interim professional are limited.

Hence 2011 has seen little slow down in the change agenda of the banking sector and the need for interim professionals with industry expertise, content expertise and strong change management capability remains strong.

Despite what has been seen as an economically barren climate, the biggest issue for interim providers has been the continuous drive to source highly skilled interim professionals who are untarnished and have the ability to deliver against a changing landscape. Longevity of operation and enviable networks based on a specialist practice principle has allowed Interim Partners to succeed over new entrants to the interim market and less specialist providers

However even more so in the current financial climate, any external resource needs to be untainted and unsullied by the reputation of their previous employers. Whilst the cost of tighter regulatory reporting has been seen by all financial intuitions, so a natural consequence has been for reputable interim management organisations to tighten further already robust due diligence procedures. Standard checks have increased well beyond standard reference, right to work and identity check to include CRB checks, credit checks, validation of any unemployed period and media checks.

A further consequence has also meant the need for clients and their procurement functions to conduct vendor assurance checks to ensure the financial stability of interim providers, so that that critical resource is not at risk and to safeguard standards and controls of best practice.

Recent reports have shown the UK recovery fading with a drop in consumer confidence and more failures on the High Street. House prices remain in the doldrums too with mortgage lending languishing according to the BoE latest figures. Clearly this has had an impact on the general employment market and reflected in the latest survey (July 11) published by the REC.

The report by the REC and KPMG signalled slower increases in both permanent staff placements and temporary/contract staff billings during June 2011. The latest expansions were the least marked for 22 and eight months respectively.

Contributing to the weaker growth of staff appointments was a further softening of demand for staff in June. Permanent staff vacancies rose at the slowest pace in six months, while short-term staff vacancies increased at the weakest rate since November 2010.

The question remains as to whether the displacement of staff across private and public sectors will transfer to the skills/experiences required on other growth areas such as Financial Services and Professional Services.

With a back drop of austerity,, clients have asked for more cost effective solutions which have come from both interim managers as well as providers. Clients with high profile change programmes have traded on the experience they offer against a lower rate whilst others have offered a longer term assignments (6 months +) in order to achieve the most cost effective rate to interim. However, where the demand curve is out of balance with supply in areas such as Risk and Compliance, rates have improved as would be expected in some cases up to 25% on this time last year. There has been no marked increased in the use of bonuses for Interims on completion of deliverables or any marked increase in the use of risk/reward incentives.

With some large change programmes such as the Banking integration of Lloyds/Hbos concluding in quarter 3 2011, the impact of the Greek, Irish and potentially Portuguese economies on UK Banks, are we likely to see a fall in the requirements for Interim Professionals?

The answer we believe is NO. As certain change programmes come to an end, others are there to take its place whether driven by need to drive operational efficiencies, competitive initiatives or regulatory reform. Many of the Retail Banks including those newly emerged are placing high importance on the Customer experience and increasingly there are more demands coming through for Interims able to add value to improvements in these areas from products, services and channels to market.

On going discussion with clients intimate that change will also come from new emerging banks entering the market, the sale of some others and still further consolidation in the Building Society sector. Whilst there may be a brief lag of time, demand is estimated to remain high.