The UK’s financial institutions are recruiting once again but their efforts are being thwarted by a saturated talent pool and a reluctance among quality candidates to move on, meaning finance houses are banking on recruiters to deliver quality hires.

“There is a perception that there are lots of good people out there. There are lots of people - but not lots of good people,” says David Kidd, head of Hamilton Blake’s finance division.

According to Jayne Houlihan, head of resourcing at Santander UK, candidates are reluctant to move due to fears around market instability. She adds that attracting candidates to the sector is also difficult, with the banking profession less highly regarded than before 2008’s crash.

Amy Butler, director at Joslin Rowe, says the whole recruitment process needs to speed up. “Clients need to hire top tier talent and fast. However, there is still a lull in labour market movements. There simply aren’t enough skilled banking professionals actively moving between competitors.”

Despite an intensifying war for talent, Houlihan says, recruiters are being flexible on fees. “Agencies are prepared to negotiate on rates providing there is an ongoing relationship promoting more than spot business. Niche roles still command a premium.”

Agencies are prepared to negotiate on rates providing there is an ongoing relationship promoting more than spot business. Niche roles still command a premium

Kidd says, though, that clients are initially squeezing recruiters on margins but after a few weeks back pedal. “Businesses that stand their ground on rates eventually get a look in. There needs to be a balance. Recruiters can’t go gung ho on their fees, but clients should not have unrealistically low expectations.”

Soraya Janmohamed, head of graduates at FreshMinds Talent, says clients have not helped their position by cutting their capacity to recruit. “While they have not recruited, they have also let people go in the HR function and don’t have the internal capacity to hire, so the price of recruiting at such short notice could potentially increase due to a shortfall in hiring.”

A spokesperson for HSBC told Recruiter that demand is increasing across the board, with service delivery areas picking up along with increased requirements for relationship managers, while good clerical and call centre staff are also difficult to find.

For Houlihan, sales and customers staff are needed to drive profits. “Sellers and customer service-focused staff are a key focus across branch networks as targets increase to raise profits and make up the shortfalls across the industry.”

And the war for talent has also intensified for insurance professionals, says Samantha Rich, head of group attraction & talent at AXA UK.

Rich says: “There is a lot of competition for business and technical expertise in these areas due to changes in customer demographics, cost bases and claims, including natural events such as weather. There is a collective desire within the industry to ensure that future growth is delivered profitably, cost efficiently and of course still delivering excellent value and service to the customer.”

For those recruiters that have the right candidates, the future is bright, says Guy Emmerson, associate director, banking and finance, at Badenoch & Clark.

“Recently we have seen investment banking picking up, closely followed by asset management. We are very optimistic for the year ahead. This feeling is echoed by our clients, most of whom are expecting to recruit far more than they have over the past 18 months.”