Morgan McKinley London Employment Monitor - City jobs market riding high

Highlights
May 07 saw further rises in new vacancy numbers in the City of Londonís employment market with volumes up 21% on May 06 levels

Compared to the previous month (April 07), new job numbers increased 4% with both sets of job growth figures signalling the ongoing strength of the financial services employment market

The skills shortage continues with candidate flow remaining static on April 07 levels, up only 1%

Despite an increase of 18% in those looking for new career opportunities compared to May last year, demand continues to outweigh supply

The average basic City salary is steady at 51,084 in May although total compensation levels continue to rise for sought after talent.

Financial skills shortages persist
There has been no let up in the supply of skilled professionals in Londonís financial services industry in May 2007 as new vacancy numbers rose a further 4% on the previous month and were up 21% on the same time the year before. The majority of investment banks are continuing to hire in significant volumes but as the smaller firms and boutique finance houses up their recruitment drives, competition to secure individuals from the same finite pool of talent is intensifying.

New job numbers coming on to the market continued to outweigh the number of individuals looking to change jobs, providing further evidence of the gap between supply and demand. The only month this year where the flow of candidates in the market overtook job numbers was in February, a result of post-bonus candidate movement.

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

ìAs predicted, City of London job numbers continued to rise in May 2007 while the number of financial services professionals looking for new opportunities showed little movement. With some of the smaller finance houses and boutique firms upping their hiring campaigns and catching up with the recruitment cycles of some of their larger counterparts, further pressure is being placed on supply.î

Compensation levels for key talent rise
While data shows average basic salary levels in the financial services sector remaining steady at 51,084 this month, the real movement in salaries continues to be in the make up of total compensation packages. Those individuals most in demand can now command a premium as employers are forced into counter offer and buy back situations.

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

ìSought after individuals may now have even more choice in the current financial services market but the pool of talent is being spread ever more thinly. To counteract this, institutions are moving their hiring processes forward and adjusting their employee offerings in order to stay ahead of the competition. In some cases, guaranteed bonuses, aggressive buy backs and counter offers are already on the agenda. This, coupled with more exotic compensation packages is having an inflationary impact on total remuneration levels.î

Chart 1: New candidates v. new jobs