Q3 2024 industry update

We launched Catalyst Partners in May this year to revolutionise the HR recruitment landscape and challenge the status quo of what had come to be expected. We knew clients needed a quicker, more agile and flexible approach to search and hire to match the speed at which businesses were changing, and that candidates deserved a more personalised and bespoke service. 

A foundational pillar in what we are building is offering value-add to the markets that we serve. We have multiple networking groups and roundtables across our different specialist teams to share market insight, collectively find solutions to industry challenges, and assist people in building their networks. As an extension to this, we will be sharing a quarterly newsletter which outlines the latest trends we’re seeing in the market across our candidate and client groups.

People and Talent

We have seen a steady, incremental improvement in the market in the generalist space since Easter. Organisations are cautiously optimistic and, in most cases, have begun planning headcount growth for 2025 and beyond. There are several themes we’ve identified across multiple sectors.

Firstly, following the surge in hiring in 2021/22, organisations have invested in LLT (leadership, learning and talent management) ensuring that they have the appropriate plans in place to develop, retain and maximise productivity from existing employees. We have seen organisations move towards a more specialist structure, building academies and curriculum aligned to the core business areas to ensure maximum value.

Secondly, the role of the HR Business Partner has become ever-more critical. As HR functions move back towards a version of the ‘Ulrich model’, the expectation placed upon business partners to be business-aligned, commercial and data driven has grown increasingly. The evolvement of HR services and the use of technology and automation has removed some of the transactional elements of the traditional HRBP role.

Finally, the one functional area yet to see an increased demand is Talent Acquisition. Organisations are wary of rebuilding teams to the size and extent they did prior, and we are still seeing lots of incredible talent professionals looking for their next opportunity.

In Q3 of this year, we launched Catalyst Partners in the US, with one of our Directors - Tilly Johnston-Jones. The US market has seen relatively similar trends to London, although the market has felt a little less quick with regards to hiring picking up. There are also a handful of nuances to consider versus the UK.

With the continued prevalence of remote and hybrid working models, there is a growing need for HR roles that specialise in managing remote teams and ensuring productivity and engagement in a virtual environment. Candidates are increasingly weary of being in the office four to five days a week, yet most financial services firms are now moving towards this in-person model, particularly within alternative investments and even more recently within tech, namely Amazon.

We are seeing a number of boutique alternative investment firms in the process of integrating Workday and there is an increased demand for talented Generalists with experience in this HR software (despite the candidate pool being relatively slim). Organisations are also beginning to assess their readiness for AI adoption, including technological infrastructure, workforce skills, and cultural readiness. As a result, there has been an increase in demand for HR professionals skilled in AI and/or data analytics to enhance recruitment processes, employee engagement, and performance management.

HR Infrastructure and Operations

We continue to see the evolution of HR Operations and People Shared Services, where technology, employee experience and data-driven strategies are becoming increasingly important in delivering the overall HR strategy. We’ve seen increased demand for strategic, pragmatic and solutions focused Head of People Services who can simplify and automate systems and processes.

In addition, we are seeing newly created roles at Director and Head of levels within the Operations space, due to the increased appetite for streamlined processes. Many clients have begun experimenting with AI and automation to transform their HR operations offering. This ranges from recruitment to performance management, as well as leveraging analytics to predict employee performance and retention - helping the SLT to make meaningful and informed data-led decisions.

Looking back over H1, we are finding businesses are falling into one of two camps: the first are those who have disjointed or fractured HR processes that need to be realigned and automated. The second is made up of organisations who have recently received investment and are looking to transform their HR infrastructure to enable the next phase of growth.

Should you be embarking on similar transformation within HR operations, we’re happy to provide benchmarking and market insights.

Reward and People Analytics

Following a slower start in Q1, hiring within reward took a turn in Q3 as People teams began looking ahead to year-end and considering necessary team adjustments. We saw large scale transformation projects within the FTSE, with the intention of reshaping their reward functions, bringing compensation and benefits together, and partnering more closely with the business.

With the EU Pay Transparency Directive coming into play in 2026, several organisations are getting ahead of the curve and looking at internal processes; including job architecture and benchmarking. The Directive aims to ensure “equal pay for equal work” by increasing transparency and enforcement around compensation. Whilst it will not impact UK-only businesses at this stage, European organisations with UK entities will need to consider whether they roll out the practice to all locations. We expect the demand for Interim Reward professionals to continue to increase as we edge closer to 2026.

The 30th October Budget announcement is also a key discussion point for leaders in the Reward market. Alternative asset managers that offer carried interest are considering possible implications as tax percentages are expected to increase. 

Interim

In 2024, Interim People and Talent hiring has mirrored 2023 in that critical coverage for parental leave, sickness and secondment has seen normal levels of activity, while transformational interim opportunities have been slower to come to market until recently. We have seen newly created interim opportunities for transformation projects with organisations utilising contractors to drive change without adding further fixed costs.

The private equity and venture capital portfolio market has been subdued for 18 months due to macroeconomic influences. We have seen a recent revival in this market with firms now exploring interim resource to achieve their strategic objectives. There have been early signs of growth in investment and M&A activity, generating senior interim opportunities; starting up an HR function from scratch, clearing HR debt, preparing a business for major growth, integration support as well as streamlining systems and processes.

Overall, the interim people market is feeling some relief as the market gently warms up. We weren’t anticipating sizable growth this year, and perhaps the steady increase of quality change and growth mandates is the reassurance we need as we look towards 2025.

Check out the team behind each of our specialist areas, and if you are interested in discussing any of the above trends in more depth, please do get in touch at contact@catalystpartners.com.