November heralds seasonal slowdown in financial services jobs market

Highlights
ï New job vacancies within Londonís financial services industry fell 9.8% in November 07 compared to October 07 levels

ï Despite the fall on the month, new job numbers were still up 23.3% on November 06 figures

ï Individuals looking for new career opportunities showed a decline of 3.9% on October 07 figures

ï And as individuals await bonus payments, particularly at the senior level, the average salary fell 5% on the month to 47,685.

New job vacancy numbers follow seasonal pattern
New job vacancies and candidate numbers for November 2007 both registered a decline on October 2007 levels, falling 9.8% and 3.9% respectively. With the credit squeeze affecting profits of a number of investment banks in the second half of the year as well as the usual seasonal factors coming into play, the drop in job numbers in November 2007 is expected. Seasonality factors always hit the recruitment market in the last few months of the year with the focus predominantly being on replacement hiring rather than new job creation. In addition, where banksí profits have been hit, staff costs including bonus payouts will inevitably be reviewed. However, it must be noted that the 9.8% drop in new job vacancies between October and November this year is similar to that of last year, which registered a fall of 12.4% over the same month in 2006.

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

ìIt is very easy to make sweeping statements about the impact of the credit crunch on financial services hiring in London but the reality is that it is almost impossible to predict the extent of the fall out at present. Recruitment activity in the middle and back office is still happening and we would typically expect volumes to be quieter at this time of year. Comparisons between 2006 and 2007 monthly figures reinforce this.

There are too many conflicting views in the market currently to make any firm predictions for the coming year and we wonít be able to judge the full impact of the past few months until the bonus season is over. It is worth remembering that it is still a candidate short market and whilst there have been some redundancies, there are still good opportunities out there.î

Bonus season affects basic salary rates
The average basic salary fell 5% in November 2007 to 47,685 compared to the previous month. The drop was largely driven by director and senior level average salaries declining by 6.5%. Hiring activity at this level and in turn basic salaries fall off at the end of the year as budgets are spent and bonus season gets underway. With less urgency to hire pre-bonus season, organisations are less likely to offer inflated salaries and guaranteed bonuses to encourage individuals to move roles. Likewise, individuals are less willing to move until their bonus has been paid.

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

ìAs organisations focus on hiring plans for the new year rather than securing fresh talent now, they are less likely to offer inflated salaries and guaranteed bonuses to entice individuals to move. This explains the slight drop in basic salary levels in November. In the new year, I would expect these to return to the average levels seen during 2007.

With some exceptions, it is likely to be a challenging year for managing bonus expectations as a number of investment banksí profits have been hit by the credit crisis. Organisations will need to manage bonus pots particularly carefully to ensure key employees are looked after and talent is retained.î