Cuts in bonuses such as those announced yesterday by Alastair Darling for staff at the Royal Bank of Scotland, and bad publicity surrounding the banking industry, are having a major effect on recruitment in the finance sector, say recruiters. The chancellor says that this year’s total bonus pot at the bank, which has been bailed out by tax payers, will be cut from £2.5bn last year to £340m this year. 

David Colgrave, chief executive of Ardent Search & Selection, told Recruiter: “ A sector, which used to be seen as an attractive career path, has certainly been dealt a hugely damaging blow. The institutions which are particularly suffering are the ones which instilled a ‘gamble banking’ culture focussing on high return, ultimately high risk, investments.

“Candidates, who would previously have gone into banking, or who are trying to extricate themselves from the sector are now looking for opportunities elsewhere, for example in other service based businesses where their skills are more readily transferable,” Colgrave continues.

Nicholas Broughton, director of Fortuna Search & Selection,  told Recruiterthat the prospect of reduced bonuses in  banks receiving government aid  was already having an effect. Broughton says that independent advisory houses, alternative asset firms, consultancies and major corporates are taking advantage by recruiting bankers fearful of a fall in their bonuses.

However, Steve Leeson, associate director of Morgan McKinley, told Recruiter that those already working in the finance sector were determined to remain.   “Financial services is still seen by a large number of individuals as an attractive place to work and they remain highly motivated to stay within the sector where they have built up their skills and experience.”