Morgan McKinley London Employment Monitor

Extremely difficult conditions for Londonís financial services job market continue into the new year

New year, but tough conditions continue within the City jobs market
The extremely challenging conditions within Londonís financial services industry and the hiring market within the sector continued into the first month of 09. The seasonal new year uplift of new job numbers increased 59% compared with the previous month (December 08). However, this number was still 64% down on January 08 levels demonstrating the high level of caution towards recruitment that is still present within the sector.

This cautious approach to hiring was reinforced by the average time taken by individuals to secure a new role in January 09, which was 80.9 days; 20.4 days longer than it took their counterparts in January 08.

The number of financial services professionals who started to look for a new role during January 09 increased by 32% compared with the previous month (December 08). However, this was a 40% decrease versus a year ago (January 08). Redundancy announcements in the City have fed into the new candidate figures each month. Anecdotal evidence suggests that those in employment, including many who are waiting to see if they will in fact receive a bonus payout this year, are staying put rather than voluntarily entering such a volatile job market.

Andrew Evans, Managing Director of Morgan McKinley comments: ìTraditionally, we would expect job numbers to increase in January as new hiring budgets are signed off and businesses begin implementing their 2009 headcount plans. Given the extremely difficult situation that Londonís financial services jobs market faces, it is quite significant that this uplift in new job vacancies actually occurred this year. However, the reality is that there were still considerably fewer new job vacancies available in January 09 compared with a year ago.

ìOn the candidate side, we would also expect to see a large spike in individuals entering the job market in the new year. While this month on month increase did occur, there were fewer financial services professionals who began their search for a new job opportunity in January 09 compared to a year ago.

ìRedundancies have meant that significant numbers of people have been forced to start looking for new job opportunities and at present these individuals are making up the vast proportion of new candidates each month. Those in employment are choosing to stay where they are rather than enter a volatile jobs market, particularly if they think there is a chance of a bonus payout. If you are looking for work right now, the market is incredibly competitive as there continues to be many more people chasing fewer jobs.î

Average City salary
The average City salary registered 49,983 in January 09, down 6% compared with a year ago (January 08). This figure rose slightly by 1% versus December 08.

Andrew Evans, Managing Director of Morgan McKinley comments: ìGiven the current situation in the City jobs market, it is no real surprise that there has been a reduction in the average basic salary for Londonís middle and back office financial services professionals when compared with January last year. When there are more candidates in the market than available jobs, the pressure on employers to pay inflated salaries eases and so, inevitably, there will be some stabilisation or slight reduction in basic salaries. Of course specialist skill sets in certain areas will continue to attract above average compensation.î