New Year bounce fails to halt long-term fall in City jobs

Canary-WharfA rise of 76% in newly available London financial services jobs between December and January could not disguise a long-term decline in employment in the City.

Recruitment firm Morgan McKinley observed 2,331 new London financial services jobs advertised in January, an increase of about 1,000 compared with the previous month, but 18% less than were advertised in January 2012.

The data supports research from the Centre for Economics and Business Research, which predicts the number of City jobs will fall by 13,000 this year.

“While a 76% increase in job availability may seem like a sign of an improving market, looking back at 2012, job availability fell to a real low across the City, and the 2,331 jobs in the market in January 2013 remains relatively low compared to 2010 and 2011,” says Hakan Enver, operations director, Morgan McKinley Financial Services.

There is often a seasonal bounce in hiring in January as managers gain access to recruitment resources that were denied them until the New Year. Many managers are keen to hire new staff at this time of year to preempt the “post-bonus attrition” seen in the market after gratuities are paid in the first quarter.

Meanwhile, employees who anticipate receiving a small bonus, or none at all, may choose this time to change jobs so they gain an advantage over colleagues who wait until their bonus is paid.

Compliance and IT departments are likely to be busiest when it comes to hiring, says Morgan McKinley. In response to high-profile legal cases, financial companies are investing in initiatives to prevent financial crime, such as money laundering. Meanwhile, the demand for sophisticated financial reporting is creating a need for computer specialists.

With City employment on the decline, competition for jobs is expected to be fierce. However, Morgan McKinley says it registered only 5,065 new financial services jobseekers in January - 26% fewer than in the same month in 2012. This figure includes jobseekers in and out of employment.

“From a job availability perspective some pockets of the market will continue to hire in the next couple of months, particularly where there is regulatory need across governance, operations, finance, and IT where large-scale projects are now underway,” says Enver. “However, there is less visibility over how economic issues and the impact of Libor penalties for financial institutions may play out. It’s very possible we may continue to see a fluctuating hiring market throughout the first half of this year.”

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