City firms anticipate steady increases in hiring during 2005

As part of its ongoing research, Morgan McKinley found that in a survey of City firms 64% anticipate an increase in new hiring of up to 20% during 2005.



The key areas of anticipated demand in 2005 are in derivatives, operational and quantitative risk management and for high margin product roles such as product control and technical accounting. Candidates with specialist accounting or documentation skills are also expected to be in high demand throughout the remainder of the year.

Basic salary offerings expected to remain steady

Morgan McKinleyís survey also reveals that despite anticipated increases in hiring, the majority (64%) of respondents do not expect basic salary offerings to rise dramatically. However, 36% of City employers do anticipate an increase in basic salary offerings with 80% of employers in banking operations expecting increases, closely followed by risk management where 60% of employers predict a rise in salary offerings. Those respondents anticipating salary increases expect them to rise by an average of 8% over the year.

Robert Thesiger, Chief Executive of Morgan McKinley comments:
ìOur survey results suggest that City employers are gearing up for further improvements in market activity over the remainder of 2005 and hiring levels will increase accordingly. Within key areas such as operations and risk management, where hiring is already at its highest level in years, volumes are likely to continue to increase during the next six months. However, the upward trend in hiring levels is unlikely to lead to great hikes in basic pay rates for the majority of City workers, as experienced professionals in high demand areas are looking for roles that offer a good overall compensation package, definite career progression and a better work/life balance rather than merely a higher salary.î

50% of City employers are finding it more difficult to hire good candidates than a year ago

As the City predicts hiring increases, it would appear that firms are also finding it more difficult to find good candidates than this time last year. 57% of respondents said that they are currently finding it more difficult whilst 7% are finding it significantly more difficult. The business areas where demand is currently at its highest include risk operations, product control and finance.

Robert Thesiger continues: ìDemand in the City is strong across the board and banks are looking for good candidates to fill roles at all levels. However, in key areas such as technical accounting, risk, compliance and derivatives, high-calibre candidates with the right skills are in short supply. The market is now very much candidate-driven and the most talented individuals in the market can demand extremely attractive compensation packages. These candidates are now receiving several offers at any one time. In certain cases, we have also started to see the return of ìgolden hellosî and guaranteed bonuses for the very best in the market.î

City Salary offerings up 1% compared to February

Over the twelve months since March 2004 the average basic City salary offering has risen by 1.6%. The average basic City salary offering is now 46,990 (see Chart 1) compared to 46,251 in March 2004. Administrative and support staff can expect to be offered an average salary of 28,162, whilst middle market professionals can now expect an average basic salary of 43,961. The average salary for those seeking senior professional/director roles has increased this month to 68,846.

Robert Thesiger comments, ìAs our annual salary survey indicates, salaries are continuing to rise for the most sought after individuals in the market but elsewhere, basic salary levels are following a steadier path and despite the predicted growth in hiring volumes for 2005/2006, we donít expect this to change.î

Time taken to secure a position down by 7%

This month saw a fall of 7% in the amount of time it takes for a candidate to secure a position.

New jobs and new candidates decrease

The number of new jobs coming onto the market fell in March by 10%. Morgan McKinley estimates that there are currently 10,521 outstanding vacancies in the City, which is still over double the number recorded a year ago. The number of available candidates also dropped this month, by 12% to 8530 (see Chart 2).

Robert Thesiger explains:
ìDespite a shortage of good candidates in some areas, jobs are now being filled more quickly than at the start of the year. This is because banks are realising the need to move more quickly in order to secure the best candidates in the market. With a short month in March due to the Easter holidays, much of the activity from the previous couple of months was concluded in March. Also, fewer candidates registered for employment this month but as we pick up after the holiday period and move forward into April both the number of new jobs and new candidates should start to increase again.î