Challenging outlook for financial services recruitment market

Morgan McKinley London employment monitor

Highlights

The guarded approach to hiring in Londonís financial services industry continues with the number of new job opportunities in March down 2% on February 08 figures and 23% on March the previous year

Candidate flow decreased 3% on the previous month but rose 4% on March 07

During March 08, the average time it took for an individual to secure a new role was 60.4 days, an increase of 10.7 days on the same month the previous year

The average City salary remained relatively steady at 49,765, a drop of 0.7% on February 08 and 0.6% on the year

However, individuals can still gain an average 20% increase on their basic salary when moving roles.

Diversification of City employers

In March 2008, the financial services industry in London experienced a slower rate of growth in new job vacancies compared to the same month the previous year, mirroring similar activity levels to those recorded during January and February. Overall, new job volumes registered a minor fall of 2.3% on the previous month (February 08) but 23% on March 07 figures.



Following the annual trend of the past few years of reduced candidate flow in March versus the previous month, individuals looking for new job opportunities dropped 3% in March 08 compared with February 08. However, candidate movement was up 4% on March 07. The number of individuals looking for a new role outweighed the number of new job opportunities for the third month this year and those candidates who did secure a new job during March took longer to do so than a year ago, an average of 60.4 days compared with 47.9 in March 07.

Although the pace of growth in new job vacancies coming on to the market has slowed in the first quarter of the year as traditional high volume recruiters have held back on their headcount increases, niche boutiques and smaller investment houses have continued with their expansion and hiring plans, creating alternative career options for the Cityís talent.

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

ìThe slower pace of new job opportunities coming on to the market in January and February has continued throughout March. These figures show that recruitment within financial services in London has entered into a new phase of its cycle. Job volumes are lower, candidate supply has exceeded demand for the third consecutive month this year and the time it takes for individuals to secure a new job has increased by an average of 26%.

ìI think most would agree that the remainder of 2008 will be tough for both the financial services industry and financial services recruitment. It is clear from the announcements of banksí Q1 results that while some performed better than expected, a number of bulge bracket firms have still had to deal with significant losses. Confidence is of paramount importance within any economy, but particularly in the micro-economy of the City, and until there is a significant increase on existing levels, financial services and within that, the recruitment environment will remain challenging.

ìHaving said that, the financial services landscape is far more diverse than it was several years ago and while some of the larger organisations may have slowed their hiring in certain areas, smaller financial institutions are pushing forward with their expansion plans. Increased levels of recruitment within these areas, has partly offset the slowdown elsewhere.î

Average salaries remain stable

The average salary remained relatively static, registering a drop of 0.7% on the previous month (February 08) and 2.9% on March 07 figures. Individuals who did move roles during March received an average increase of 20% on their basic salary, the same amount as those who moved in March 07.


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

ìUnderstandably, over the last few months, individuals within financial services have adopted a more considered approach to moving roles; an attribute consistent of an uncertain market such as the one weíre in. However those individuals who did seek new career opportunities in March received an average increase of 20% on their previous basic salary. It is to be expected that the fluidity of the candidate market will continue at this pace for the foreseeable future.î