LONDON

Commerce & Industry

2006 has been a period of consolidation. Whilst the HR recruitment market has remained extremely buoyant, salaries have stabilised and the considerable increases we saw in the second half of 2005 and the beginning of 2006 appear to have peaked. The market has been driven by bigger blue-chip organisations, and the buying power of the FTSE100 and financial markets continues to attract top talent. The revival of fortunes within the technology and telecoms industry continued throughout the year, and the demand for HR business partners has remained high. One of the largest growth areas of 2006 was in organisational development/design, where there was a considerable increase in demand particularly from larger corporate clients. This has prompted a corresponding shift in both permanent salaries and interim rates in this area.

The media industry has been an active recruiter in 2006, most commonly for hands-on generalists to help establish HR policies and procedures. Salaries have increased slightly over the last 12 months, mainly due to market forces and the need for all sectors to keep pace with the technology companies and financial services.

Recruitment into retail clients has remained steady, reflecting the fortunes of some of the larger retail organisations. Salaries within this sector have always been lower than in most other sectors and this has proved one of the key barriers to attracting top talent and remaining competitive in a buoyant market.

In the FMCG and energy sectors we have seen HR functions in some of the key players undergoing large scale change, through outsourcing and transformation programmes. This has led to uncertainty and hiring requirements in most instances.

In summary, HR recruitment has continued to see excellent growth in 2006, however salaries in most disciplines have stabilised. Confidence in the majority of organisations has remained high and the desire to recruit commercially astute HR business partners along with key specialists in organisational development and compensation and benefits has remained strong.

October/November saw a slight slow down in the market, but we do expect similar recruitment volumes and market dynamics in 2007 to those we have experienced during 2006.

HR Financial & Professional Services

2006 was a year of contrast, with skill shortages meaning that demand from employers has outstripped supply. The demand for HR professionals has been consistently high, with organisations hiring across both generalist and specialist functions. Unfortunately, the candidate pool has not grown with demand, hence shortages emerged for many skill set areas resulting in an increase in both time and cost-to-hire levels.

We witnessed a further increase in the number of professional and financial services organisations encouraging applications from sectors outside their own, and a continued emphasis on HR professionals able to adopt a business and client facing approach. This trend has been most notable within legal firms, a sector that has traditionally been very specific about candidate qualifications and backgrounds.

Positive trends we have seen in reaction to this increasingly competitive market include a more candidate focused approach to the recruitment process, increased flexibility from clients to secure the most talented candidates ahead of their competitors and streamlined processes to cut down time-to-hire ratios.

HR Investment Banking

During 2006 the financial markets were at their most buoyant since the boom in 2001 with many investment banks posting their highest profits for some time. Despite volatility in the stock market over the last six months of 2006, the quarter three results from several of the major institutions exceeded analyst predictions and helped to dispel doubts and uncertainty.

Correspondingly, we saw an extremely busy HR recruitment market throughout 2006. The majority of roles coming to market were for generalists and recruiters – in particular generalists with exposure to front office client bases and graduate recruiters.

High quality candidates have remained in short supply, resulting in the emergence of a number of key trends.

• Remuneration – increased competition for the most sought after candidates has resulted in an uplift in the reward packages offered, with basic salaries rising alongside the value of associated benefits packages. In particular, interim rates have increased and there is a growing awareness that fixed term contracts in particular need to take into account a total permanent package to be competitive. For example, a number of clients have had increased success by applying a 15% uplift to cover benefits an individual may receive in an equivalent permanent role.

• Talent/succession – more organisations are putting a focus on talent management, retention and succession planning as a direct reaction to the market, resulting in a higher number of counter offers to candidates.

• Employer branding – there has been a growing appreciation from many organisations that if they are going to attract the best people in the market, they have to adopt more innovative methods to identify and differentiate themselves from their competitors. As a result, we are seeing more advertised campaigns, more resources dedicated to direct recruitment and an increase in the number of clients looking to use different methods to market their particular proposition to a target audience.

The outlook for 2007 across all areas of HR in the financial and professional services space remains positive.

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MIDLANDS

Market Overview

2006 was an interesting year with certain sectors experiencing growth, whilst recruitment levels in other sectors declined. Having enjoyed spectacular growth over the last three years, retail was certainly one of the casualties with a number of organisations making redundancies or putting their hiring plans on hold.

Certain areas within manufacturing have suffered this year with companies continuing to move their production facilities abroad, notably to China and Eastern Europe. The closure of the Peugeot plant at Ryton at the end of this year has impacted the region, and likewise the closure of the HP Sauce factory.

However, other industry sectors have achieved notable growth in 2006, including service, logistics/distribution and financial services.

Overall, salaries continued to rise gradually in 2006 with companies remaining keen to attract and retain the best talent into their organisation and showing a willingness to pay at the top of their salary range for these individuals.

We predict that 2007 will mirror 2006 in the levels of recruitment activity within the key growth sectors.

THAMES VALLEY

Market Overview

During the course of 2006 we saw continued high demand across all sectors for high calibre, commercially aware HR professionals. The most active sectors were hi-tech, telecommunications and outsourcing although all sectors have had high recruitment activity levels at some point with the exception of financial services.

Demand within specialist functions remained strong with particular emphasis on compensation & benefits, organisational design and talent development. Learning & development roles were less prevalent but salary levels held firm regardless.

The interim market continued to gather greater momentum and is often a career choice for HR professionals looking for greater flexibility and control of their working arrangements.

The issues we experienced in 2005 regarding multiple offer and buy-back scenarios have continued through 2006 and we anticipate this to remain a key issue next year for our clients in securing talent. In 2007 we anticipate continued high volumes of recruitment within an overall strong recruitment market.

Click here to read the UK salary survey.

Robert Walters is a leading international recruitment consultancy, placing high calibre professionals into permanent, contract and temporary positions at all levels of seniority. With a developed network of 27 offices across 14 countries, we work with leading investment banks, multinational corporations, smaller enterprises, business start-ups and the public sector.

Every year we produce a comprehensive Global Salary Survey to provide you with information about salary packages and the latest market trends across an extensive range of market sectors including:

Accounting & Finance • Banking • Human Resources • Information Technology • Legal & Compliance • Sales & Marketing • Secretarial & Support