Andy jalil - andyjalil@aol.com - Companies in Britain, particularly in the financial district (known as the ‘City’) of London, are set to embark on a hiring spree in 2018 as the need to deal with new rules and technology becomes a priority over the ongoing political uncertainty with the Brexit process.
More than two thirds of financial services firms plan to recruit staff over the next twelve months, with the majority planning to bring permanent staff on board, according to data from top City recruiter Hays.
High demand for staff has driven double-digit salary growth for new hires in the capital, as firms compete to attract the best candidates. The latest figures show salaries are likely to keep on rising next year as the fight for talent increases.
The average advertised City salary increased by 10.3 per cent in the year to October to reach £57,536, far outstripping pay outside London, according to data from jobs site Adzuna.
Big drivers of hiring in the square mile of the financial district include the imminent update to the Markets in Financial Instruments Directive (MIFID 11) as well as the General Data Protection Regulation (GDPR). Meanwhile, fintech workers in area such as data science and cyber-security are also in high demand.
Managing director of Hays London City, Mark Staniland said: “It’s promising that despite market uncertainty, financial organisations are continuing to hire as regulatory changes come into play and digital advancement are creating the need for organisations to constantly adapt and remain up-to-date.” “Demand is really strong”, which has seen “starting salaries on the up”, said Tom Hadley, director of policy at the Recruitment and Employment Confederation.
Meanwhile, median salaries across British professional services more generally declined by 0.2 per cent during the same period. Asset managers, risk managers and back office roles have seen strong growth, Hadley added, while banks in particular have been forced to compete for talent with a broader array of firms than in the past.
“Some of the big banks increasingly are competing with digital start-ups”, Hadley said. The salary increases in the City stand against the backdrop of historically low unemployment throughout the UK, although average British salaries have flattened. For employers the pool of available talent has steadily dried up, with industries across the economy complaining of a dearth of quality candidates.
Data from the Bank of England, collected by its agents in survey of firms around the UK, shows recruitment difficulties have increased steadily since the final quarter of last year. Difficulties are now approaching their post financial crisis peak, reached at the end of October 2015.
Staniland said: “Persistent skill shortages have the potential to limit production, growth and innovation – all of which could harm the City’s ability to remain competitive on a global scale.”
However, amid all the hiring spree, the UK’s biggest business group warned that the country faces sluggish growth over the next couple of years despite the outlook brightening across the global economy and the euro zone in particular.
The UK’s GDP is expected to rise to a rate of 1.5 per cent this and next year before slowing to 1.3 per cent in 2019, according to the Confederation of British Industry (CBI)’s economic lookahead.
In contrast the global economy is on the up with growth expected to hit 3.6 per cent this year and 3.7 per cent in 2018. The CBI has upgraded its forecast for the Eurozone, with a buoyant recovery in several member states picking up pace. The bloc’s GDP is now forecast to hit 2.2 per cent growth this year, up from previously forecast 1.7 per cent, and 1.8 per cent next year.
Although growth elsewhere will provide “a supportive backdrop for trade and economic growth in the UK”, inflation is expected to remain above the Bank of England’s two per cent target, putting more pressure on households suffering years of squeezed incomes.
CBI chief economist, Rain Newton Smith said: “We expect domestic demand to remain soft. Household spending will remain under pressure from squeezed real wages and Brexit uncertainties will weigh on business investment.
But encouragingly, we should see more support from net exports, buoyed by the lower pound and a resurgent global economy.” The CBI warned its outlook is subject to a high degree of downside risk, especially in 2019, where “a more disorderly outcome from Brexit negotiations could disrupt the economy and financial markets.”
(The author is our foreign correspondent based in the UK. He can be reached at andyjalil@aol.com)
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