City jobs market remains resilient despite triple threat of pandemic, Brexit trade deal and US
The latest figures from Morgan Mckinley’s Quarterly London Employment Monitor reveal that the City has weathered the worst of 2020’s difficult year. Brexit, the pandemic, and a change in the US president had all been predicted to inflict untold damage at the heart of the UK’s financial sector, yet, the employment figures tell a different story.
- 2% quarter-on-quarter decrease in jobs available
- 1% quarter-on-quarter increase in job seekers
- 14% increase quarter-on-quarter salary change
- 36% year-on-year decrease in jobs available
- 31% year-on-year decrease in job seekers
- 49% decrease from 2020 for 2019 for jobs available
Hakan Enver, managing director, Morgan McKinley UK commented: “Brexit on its own would have been hard enough. However, the City had to deal with the disruption of the global pandemic and the potential upheaval of the change of leadership in the US. Despite this, Q4 ended with jobs seeing a small decrease of 2% which continued to counter the massive drop of 60% in Q2. This shows real resilience and steadiness in stark contrast to the beginning of the year when overall numbers for 2020 fell dramatically compared to 2019.”
“Banks and financial service firms have fared well by adapting quickly and responded to the needs of their employees and setting up remote working, which has ensured they can maintain business as usual. Many employers are focusing on hiring when needed and feasible. We’ve seen growth in IT, marketing, and digital roles, whilst auditors outside the big 4 have also been in demand,” said Hakan.
Hakan continued: “Brexit failed to deliver a big hit to financial services employment. Initial warnings that jobs would leave the City have been scaled back. More recently, much of the focus has been on the consequences of the imminent loss of passport rights. However, the City has had several years to prepare for the various potential outcomes of Brexit negotiations by reducing exposure and becoming more global.”
While the City’s future success is certainly not written and there is a long way to go on the EU deal for services, Hakan highlights: “UK chancellor Rishi Sunak has granted the EU access to UK markets, despite a lack of reciprocation on Brussels’ part. It is too soon to tell if any future agreement will help financial services but it does provide certainty and an opportunity to catch up on lost ground. Organisations are now looking at new fast-growing business lines that they can add to where London is already globally competitive. This includes foreign exchange and derivatives or perhaps becoming a centre for sustainable finance and the hub for fintech.”
Hakan concluded: “The pandemic, number of lockdowns, initiatives to go back to the office and home-schooling have undoubtedly led to a drop in those looking for jobs by 31%. We saw less people looking for jobs due to a lack of physical meetings, the furlough scheme being in place and the sentiment by job seekers that they wanted to see the year through and restart the job search in the new year. Job numbers are steadily moving in the right direction. The financial sector is continuing to hire and we are seeing a renewed optimism as we head into 2021.”
During Q4 2020, the average change in salary of those moving from one job to another was 14%. Whilst the sentiment of several companies was to continue hiring talent within their organisation, the salaries of new employees dropped slightly to compensate for the current environment. It is too early to say whether or not overall compensation packages will be further impacted due to Covid. As flexibility increases and working from home becomes the norm, there is a possibility that salaries on average may fall to factor aspects such as less need for travel.
