Surge in temps as firms overestimate the impact of the credit crunch

- Credit crunch caution led to smaller than usual jump in New Year permanent job vacancies

- BUT, hiring freezes unwarranted ñ no slowdown in workload

- Surge in temps to fill gaps in workforce in February

Firms in the UK financial services sector cut back the number of permanent jobs advertised in January and February ñ a cautious response to the credit crunch. However, despite being more reluctant about committing to increases in the permanent headcount, firms are still busy. As a consequence, there was a sharp spike in temporary job vacancies in February 2008 (a 42.6% increase from January) as firms have started a massive push for contract and contingent staff to fill short-term gaps in the workforce.

Traditionally, the UK financial services jobs market sees a sharp rise in permanent job vacancies in January and February each year as firms look to bolster their workforces, and to reflect greater candidate activity in the New Year (table I). This follows an annual decline in the number of job vacancies in December ñ a consequence of workers staying put over the bonus season and Christmas. In 2008 however, permanent job vacancies have not risen as steeply as usual and temporary positions have spiked upwards instead (table II).

Nabila Sadiq, managing director of Joslin Rowe Temporaries, explains: ìThe smaller rise in permanent job vacancies this January and February is a clear sign employers have taken a more cautious approach following recent market turmoil. However, in the middle office at least, there hasnít been the sort of slowdown anticipated. The workís there to be done and someone has to do it - firms are finding they need staff levels consistent with previous years and are turning to the temporary market to cover the shortfall.î

Table I


Table II


Time to fill
Temporary positions took 26.3% less time to fill in February 2008 compared with the previous year. The average time to fill a temporary position took only 5 days in February, down from 7 in February 2007. This reflects the significant push for temps across the sector last month.

Pay
Hourly rates for temporary workers in the financial services sector have remained stable over the past year, but have increased over 10% for temporary secretarial staff. On average temporary secretaries were paid 13 an hour in February 2008, compared with 11.55 in February 2007.

Amongst permanent workers, pay levels in Banking Operations increased 6.7% yoy in February ñ up from 30,389 to 32,431 on average, while typical salaries rose 3.7% to 50,778 in Accountancy and Finance over the same period. Some back office roles are also seeing the benefits, too. Pay in Human Resources is back on the increase.

Nabila Sadiq says: ìThe front office fee earners might be less busy than they were a year ago, but the middle office area is still going strong. Accountancy and finance, Compliance, Risk have been kept busy. There is a definitive split in the fortunes of different areas of the banking arena.î