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Australia’s financial services sector strengthening in 2014
The financial services sector in Australia is stronger now than it has been in the last few years, and it is only getting stronger.
At Michael Page, we’re seeing increasing demand for financial services professionals across all sectors, and the 2014/15 Michael Page Salary & Employment Forecast similarly reflects a positive sentiment toward hiring in the financial services space. Some 36% of employers surveyed for the report state that hiring activity is currently stronger than it has been over the past 12 months.
We are also seeing salary increases for the first time in a few years. More than two-thirds of financial services employers (71%) indicate that all their employees will receive a salary increase within the next 12 months. In addition, 83% of employers will award bonuses to their workers, up from 71% in last year’s report.
There are various drivers across the sectors that account for the current strength of the market.
In the years following the Global Financial Crisis, the consumer banking sector has been very risk averse. Over the last few years, teams have been stripped back to their leanest possible structure. This means that any departures now need to be replaced, as those roles can no longer be absorbed by existing teams.
At the same time, consumer and business confidence is once again growing, leading to increased activity in the form of credit applications, business and home loans, cash deposits and investments.
According to the 2014/15 Michael Page Salary & Employment Forecast, 39% of employers in financial services plan to increase headcount in the next 12 months. This is higher than the overall average of 32%.
Most investment banks operating in Australia have their head offices overseas – in the US, UK or Europe, while the investment operations of Australian banks are local, as they are smaller in size and number.
Due to higher market confidence in their primary locations, banks with head offices overseas are less risk averse than they have been in previous years. When it comes to their Australian operations, most are showing more willingness to invest in increased headcount.
In addition, there is a growing amount of risk management activity that is driving demand for expansion in the investment banking sector – for example, corporate loans and merger & acquisition activity.
In 2014, superannuation payments for Australian employees have increased to 9.5% and will continue to rise until they reach 12% in 2022. The Australian system is more advanced than in the US or Europe, for example, where employer payments are neither compulsory nor as strongly regulated.
The increase of activity in providing advice, administration and investment management makes this a growth sector.
Insurance and reinsurance are two sectors that have been relatively stable over a number of years, with Australian operations remaining static, having had any transactional activities offshored a number of years ago for cost-saving purposes.
Visit the Salary Centre to download the latest Salary & Employment Outlook for details on hiring expectations, salary rates and industry-specific trends.