Morgan McKinley London Employment Monitor July 07

City hiring continues into the summer holiday season

Highlights

- As expected, new financial services job vacancies rose a modest 6% in July 07 compared to the previous month, as the City moves into the summer holiday period

- Following an abnormally strong July 06 (the highest month for the whole of last year), July 07 job numbers were up 3% in comparison

- Individuals looking for new career opportunities increased at the same rate as jobs between June and July 07, rising 6%

- Skills shortages within the financial services market continue to be a key issue despite 19% more candidates looking for new jobs in July 07 versus the same month the previous year

- The average basic salary has remained relatively steady at the 51,000 mark (July 07 - 51,031), but guaranteed bonuses are becoming more prevalent as firms tempt individuals to move before end of year bonus payouts.

Healthy hiring levels continue

With the start of the summer, new job vacancies in the City of Londonís financial services industry have seen a modest rise of 6% in July 2007 compared to June figures. However, July numbers were up only 3% on the same time the previous year. This is due to extraordinary high levels of recruitment activity in July 2006, rather than a decrease in hiring this year. Out of sync with the traditional recruitment calendar, July 2006 recorded the highest level of new job vacancies for the whole of last year.

Strong levels of hiring have been sustained during the first half of 2007 and healthy amounts of recruitment activity are continuing into the summer holiday period. However as reported in June, banks typically use these months to review activity from the first half of the year and prepare for the launch of new hiring campaigns in September.

Robert Thesiger, COO Europe of Morgan McKinleyís parent company, Imprint Plc comments:

ìIt is imperative to point out that recruitment in the City remains at an exceptionally high level and the appetite to hire amongst the investment banks is still very much there. On the flip side, we will have to wait until August figures are released to see whether recent stock market volatility will have had any immediate impact on City hiring figures this month, although typically it is one of the quietest times in the recruitment calendar anyway.î

Guaranteed bonuses on the agenda

As we move into the second half of the year, average basic salaries remain relatively steady at the 51,000 mark (July 07 - 51,031). Given the continued skills shortages in the financial services sector, exceptions are still being made in basic pay for the most sought after individuals. Also, guaranteed bonuses are becoming more prevalent at the senior end of the market as institutions look to encourage individuals to move before their end of year bonuses have been paid.

Robert Thesiger, COO Europe of Morgan McKinleyís parent company, Imprint Plc comments:

ìAs the gap between supply and demand in the City of Londonís jobs market continues, skilled financial services workers are receiving multiple offers and counter offers as organisations try to attract and retain the best. We have started to see a growing use of guaranteed bonuses by firms, particularly at the senior end of the market. Prospective employers are using the guarantee to encourage individuals to move before end of year bonuses are paid. However individualsí current employers are counteracting this measure by offering their own ëguaranteesí to key staff in order to retain them.î