In 2022 we saw a turmoil in the UK financial services market not seen since the 2008 post Lehman Brothers financial crisis. Levels of inflation increased in excess of 10% for the first time in 40 years, against a backdrop of the war in Ukraine, the post COVID-19 debt wave and the ongoing effects of Brexit. The 2nd half of 2022 was witness to a UK economic confidence meltdown. Interest rates suddenly jumped to 4% as the Bank of England acted swiftly to reduce inflation.
The effect on UK financial markets was immediate. Financial products were withdrawn as the market took account of this and considered its response. In a brief period of September chaos, the mortgage market suddenly closed as risk committees paused for breath. It was not a time for recruitment, it was time to steady the ship.
February’s MPC announcement of an increase in base rates feels like we are slowly coming to a peak. In response, the mortgage market has found a new normal more akin to pre-2008 levels and it feels like 2023 will be a more manageable world. Our clients in the world of retail financial services are embracing the new normality. We are seeing a steady increase in both executive and interim roles as we show the traditional British “stiff upper lip” and return to business as usual.
The turmoil in the market also coincided with an unprecedented demand for talented executives and the race to secure key appointments was intense. Clients had to move quickly and challenge their own internal processes to ensure that they didn’t miss out on candidates, while at the same time needing to work hard at retaining and motivating key members of their staff, as everyone grappled with both the positives and negatives of hybrid working. Particular demand was seen in areas of treasury, finance, IT and transformation with digital transformation being a key focus for many of our clients.
This period has also seen a real test of board effectiveness, leadership, and resilience at a time of extreme crisis. Boards that have struggled most are those with limited diversity in terms of gender, ethnicity, age, and sector, but also thinking style. Boards need a vibrant mix of NEDs, combining extensive experience, leadership and the ability to directly relate to the impact on customers and employees, alongside a digital DNA and true understanding of what it means to embed ESG criteria into an organisation committed to flexible working.