Andy jalil -
andyjalil@aol.com -
In these difficult times for the UK government with the complications of Brexit and the pressures brought upon the Prime Minister Theresa May, not least by her own ministers, there is some welcome news on the employment front.
While the unemployment figure remains the lowest in 42 years, the number of available professional roles in the financial district (known as the ‘City’) continued its surge in October with a 14 per cent year-on-year rise in the number of jobs and a spike in salaries.
Buoyant demand for compliance staff in the face of new regulations has been a major driver of the hunt for more staff, according to data from recruitment firm Robert Walters.
Financial services are currently adjusting to the broad-ranging Markets in Financial Instruments Directive (Mifid II) as well as work on the Basel Committee on Banking Supervision’s risk reporting requirements.
In operations, the figures show strong demand for middle office roles in over-the-counter transactions, those that take place outside of exchanges. Additionally, lending and asset financing have been strong hiring areas in both operations and risk. Chris Hickey, Robert Walters chief executive for the UK, Middle East and Africa, said: “Regulatory pressure continues to be a key factor in driving recruitment among banks and financial services firms.”
Junior-level employees on the investment buy side, such as pensions funds and hedge funds, are showing particularly high “candidate churn,” suggesting increased confidence in the ability to find new work, said Hickey. The figures are corroborated by the latest data from the Association of Professional Staffing Companies (Apsco), which found a nine per cent rise in vacancies currently registered in finance and banking.
The demand for staff has driven up salaries far in advance of the rest of the country, with a 5.4 per cent rise in financial services salaries year-on-year, before bonuses are taken into account. Separate data published by professional social network Linkedin suggested that the number of jobs in finance grew by 22 per cent year-on-year last month, leading the way in the London labour market.
The seller’s market for City job is proving to be problematic for employers already struggling with skills shortages, according to Colin Stanbridge, chief executive of the London Chamber of Commerce and Industry. “Companies are doing what they always do: they’re getting on with life,” he said, but the government must act to end the doubt over the status of EU nationals, an important source of labour for London firms.
The data from Robert Walters suggests firms are increasingly turning to contractors to fill gaps, with the number of contract roles increasing by 23 per cent year-on-year. Hickey said: “Permanent roles are still very much available but we have also seen a marked shift towards employers increasing their levels of contract recruitment.” He added: “Given the current climate of political and economic change, business are focusing on building adaptable, agile workforces which can respond to the changing situation.”
Wage growth is expected to continue to pick up over the course of 2018, according to new data published by the Bank of England (BoE), with employers intending to add more workers amid a tight labour market. Pay settlements will be between 2.5 per cent and 3.5 per cent higher next year, an increase of half a per centage point compared to this year, according to the BoE’s agents’ summary of business conditions.
A separate survey of recruiters published by the Recruitment and Employment Confederation (Rec) painted a similar picture, with growth in starting salaries remaining above normal levels. The net balance of recruiters stating that salaries for new hires rose last month to the second-highest level since the Brexit vote in June 2016. While jobs were available the number of candidates available continued to shrink, particularly in London.
The latest figures support the BoE’s claim that wages are set to pick up. The BoE earlier this month raised interest rates for the first time in a decade, with the predicted increase in wage growth a key part of the justification for the hike. The sluggish performance of wage growth over the past year when compared with prices has been one of the key stories of 2017, making the BoE unwilling to raise interest rates before its latest meeting despite a surge in inflation well above its two per cent annual target.
(The author is our foreign correspondent based in the UK. He can be reached at andyjalil@aol.com)
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