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In the final countdown to Brexit, jobs numbers disappoint

Morgan McKinley London Employment Monitor

London Employment Monitor September 2018 highlights:

  • 2% decrease in jobs available, month-on-month
  • 38% decrease in jobs available, year-on-year
  • 19% decrease in professionals seeking jobs, month-on-month
  • 35% decrease in professionals seeking jobs, year-on-year
  • Average salary change for September is 20%

Cocktail of postponed holidays and Brexit fears sink summer jobs numbers

Traditionally one of the highest performing jobs months of the year, September failed to deliver its usual spoils. Jobs available were down a modest 2% month-on-month, and a rather more dramatic 38% year-on-year. “In Brexit adjusted terms, August was a strong jobs month. What’s disappointing is that it wasn’t the beginning of the seasonal spike, it was the end of it”, said Hakan Enver, Managing Director, Morgan McKinley Financial Services.

Enver attributes the low figures in part to a change in holiday patterns. The uncharacteristically warm summer drastically increased the number of staycationers who wanted to enjoy London without the chill and the rain, opting instead to take summer breaks much later than usual, some even as late as September. The pattern shift was so significant this year that Thomas Cook issued a profit warning.

The other culprit for the low job numbers was a more familiar one: Brexit. The political and policy disarray surrounding the terms of the transnational divorce is creating a new round of jitters among the City’s largest employers. "The cabinet appears to be spending considerably more time fighting one another than fighting for a good Brexit deal. It’s an embarrassment", said Enver. "It's time for the British Bulldog to wake up and get to work".

The disarray has heightened calls for a second referendum. In a survey of over 7,000 professionals conducted by Morgan McKinley in May 2018, 58% of respondents said they favored a second referendum. 9% were unsure, leaving a mere third in opposition. “Time and time again people are saying that they don’t trust the government to get this right, and so far the government has proved them right”, said Enver.

Job seekers’ eternal limbo

Business jitters still have not manifested in the much feared Brexodus, with reports showing that the number of staff being moved elsewhere in the EU is in the hundreds, not thousands. “That businesses are opting to keep people in the City for now is excellent news. But they are poised to pivot if they need to, so we may yet see a mass relocation in the coming six months”, said Enver.

After a brief summer reprieve, job seeker figures are back to their usual Brexit selves: down by 19% month-on-month, and 35% year-on-year. “Fuelled by the World Cup and the hot weather, we saw optimism from job seekers throughout the summer. But the feel good factor has worn off”, said Enver. “Very few people are going to be looking for new jobs if they think they may be having to file expensive visa applications six months down the road”, he concluded.

In alarming news for the City's medium term future, business students have begun to turn to Ireland for their studies, instead of the the UK. "Whenever there’s a brain drain, the knock on effect can be felt for years, with employers having to rely on less qualified professionals”, said Enver. “We saw this in 2008 when businesses didn't hire recent graduates, and then five years later they struggled to fill middle management positions".

Technical accounting professionals among those in high demand

A number of sub-sectors are booming, despite the flat-to-low jobs data. In financial services, technical accounting and finance business partners are the top hiring areas. The demand is driven by changes in financial reporting standards, such as IFRS 9/15, and clients tightening up on financial controls. “Institutions that are moving operations to Dublin and Frankfurt are hiring in spades for stakeholder relationship management, control budgeting, and forecasting”, added Enver.

Banks continue to struggle to keep up with innovative start-ups, giving professionals with the applicable expertise significant negotiating power when it comes to salaries. “Banks are playing catch up to create the necessary cultures and dynamic environments to attract these types of professionals”, said Enver.

Marketing professionals remain in high demand as businesses are seeking professionals who can help them build brand awareness through media and public relations, as well as internal relations experts who can help them retain and attract top talent.

Average Salary Change

The average salary change for a candidate moving from one firm to another in September 2018 was 20%.

About Morgan McKinley

Morgan McKinley is a global professional services recruiter connecting specialist talent with leading employers across multiple industries and disciplines.

With offices across Ireland, the UK, EMEA, Asia and Australia, the company’s professional recruitment expertise spans banking & financial services; commerce & industry and professional services. Morgan McKinley is a preferred supplier to many of the major employers in its specialist sectors and thousands of smaller local firms.