MORGAN McKINLEY LONDON EMPLOYMENT MONITOR OCTOBER 2009
Monitoring the pulse of the City jobs market
City job vacancies rise to highest number recorded this year
During October 09, the number of new financial services job vacancies in London rose by 15% compared to the previous month (September 09). This was the highest number recorded in any one month so far this year
October 09 also recorded the smallest year-on-year percentage decrease in new job numbers for 16 months. New job numbers were down 19% in October 09 versus October 08.
The number of financial services professionals who began their search for a new role in October 09 was up 6% on the previous month (September 09) but down 23% versus a year ago (October 08)
Individuals who did secure a new role in October 09 took an average of 56 days to do so, the same amount of time it took their counterparts in October 08
The average City salary registered 51,350 compared to 52,142 in September 09 and 48,021 in October 08.
October 09 shows further signs of improvement in Londons financial services jobs market
During October 09, Londons financial services hiring market showed further signs of improvement as the volume of new job vacancies reached the highest number recorded in any one month so far this year. New job opportunities rose by 15% in October 09 versus the previous month (September 09) from 3,843 to 4,410. The positive month-on-month uplift was to some extent supported by the year-on-year comparisons. October 09 still registered a fall of 19% in new job numbers compared with October 08, but this drop was the smallest seen for 16 months.
The number of financial services professionals who began their search for a new role during October 09 was up 6% compared to the previous month (September 09), although the annual comparison showed there were still 23% fewer new candidates registering than in October 08.
It took jobseekers an average of 56 days to find a new role during October 09, which was the same length of time it took their counterparts a year ago (October 08).
Andrew Evans, Managing Director of Morgan McKinleys financial services division comments:
The City jobs market has and continues to see a general trend of improvement each month and Octobers figures are consistent with this pattern. Londons financial services recruitment market is in a very different place compared to 12 months ago when City hiring was in the midst of a downward trend which saw job volumes contract from month-to-month. In October 09, while the volume of new jobs coming onto the market remained lower than a year ago, the overall conditions were and continue to be more favourable. Progress has been slow and somewhat unsteady over the course of 2009 but hiring within Londons financial services sector is following an upward trend as confidence starts to return, slowly but surely.
Amongst financial services employers, the appetite to hire has improved and this is encouraging individuals to start testing the jobs market and see what opportunities are out there. That said, seasonal factors are expected to kick in during November, which will mean new job opportunities and possibly candidate flow will slow over the next three months. February 2010 will be a good indicator as to whether the measured uplift in job numbers seen over the past six months will continue throughout 2010.
Average City salary
The average City salary increased 2% compared to September 09 registering 51,350. This was also an increase of 7% versus the same month the previous year (October 08) when it registered 48,021. However, the average for the whole year only saw a nominal rise of 1% when comparing the 12 month periods of November 08 - October 09 and November 07 October 08, recording salaries of 50,603 and 50,032, respectively.
UK Online Recruitment Grows in October, According to Monster Employment Index
October 2009 Index Highlights:
The Monster Employment Index UK grew by seven points as the online job market started to show early signs of recovery
Online hiring increased in the majority of sectors, led by strong growth in education, manufacturing, transportation, hospitality and sales
Job demand rose most in Wales, with notable upturns also recorded in Scotland and the South West
Online employment opportunities in the UK increased by seven points (seven percent) in October, as job demand reached its highest level since February 2009. Opportunities remain significantly below levels 12 months ago but the annual pace of deterioration has continued to ease. The overall European Index also increased, registering an uptick of two points (two percent) in October. However, offerings were down 32 percent year-on-year.
Year-on-year, hiring levels in the UK are down 29 percent. The monthly rise in October was driven by an upturn in demand in education and the export-driven manufacturing and transportation industries. There were also increases in hospitality and tourism and sales sectors, which jumped to a ten-month high as demand for service and sales occupations surged, possibly boosted by a rise in foreign visitors and improved consumer confidence. By contrast, opportunities in the construction sector remained at an all-time Index low.
The Monster Employment Index Europe is a monthly analysis of millions of online job opportunities culled from a large, representative selection of corporate career sites and job boards across the European Union, including Monster.co.uk.
European companies predict layoffs will slow
Slowdown In Layoffs
European companies predict that the rate of layoffs will slow significantly over the next six months, according to research from consultants Watson Wyatt.
The Watson Wyatt survey, which involved over 700 organisations across Europe as well as Africa and the Middle East, found 47 per cent of companies cut their permanent workforce in the past six months while only 30 per cent expect to do so over the next six months. Similarly, hiring freezes are beginning to thaw. Some 60 per cent of companies had hiring freezes in the past six months but only 38 per cent expect to do so going forward.
However, the pattern across the region is not uniform, with 45 per cent of companies in some countries such as Ireland, France, the Netherlands and the UK predicting reductions in the permanent workforce to continue over the next half year. The survey also found high proportions (40 to 45 per cent) of companies in certain sectors predicting further employee layoffs, most notably those in auto equipment, financial services and telecommunications. In contrast, the energy and pharmaceutical sectors appear to be relatively secure places for employment.
EMEA companies hiring/layoff expectations
Last six months Next six months
Layoffs/reduction in permanent employees 47% 30%
Reduction in temporary employees 48% 27%
Eliminate/reduce hiring of seasonal workers 25% 16%
Hiring freeze 60% 38%
Increase hiring of permanent employees 4% 8%
Increase hiring of temporary/contract workers 6% 6%
Pay freezes are also beginning to decline. In a similar survey undertaken by Watson Wyatt in June, 70 per cent companies reported salary freezes, this is now down to 57 per cent who have already frozen salaries or expect to do so over the next 12 months. Of the 47 per cent of organisations that have implemented a salary freeze, four in 10 have not yet decided when they will lift them, demonstrating a cautious approach to 2010.
"The speed and depth of the downturn is reflected in the degree to which redundancies and pay freezes have been applied, but the prevalence of these actions looks set to decrease significantly during 2010," said Carole Hathaway, European head of strategic reward at Watson Wyatt.
One impact of the recession has been widespread organisational restructuring, with 58 per cent of companies having made significant changes to their structure in the last six months and 56 per cent expecting to make significant changes over the next six months. Such changes have been most prevalent in Ireland, Italy, Russia, Switzerland and the UK.
However, the Watson Wyatt survey finds that despite undertaking significant restructuring programmes, many companies have not at the same time made changes to job roles and definitions.
"Organisations across Europe have reported widespread internal restructuring to realign their business to the new economic reality, said Carole Hathaway. Businesses now have the opportunity to use this period of relative stability to turn their attention to embedding these changes through roles, reward, talent and engagement practices to truly reconnect their people to the business.
According to Watson Wyatt, organisations that change their business models and core processes need to ensure that these changes are fully embedded throughout the organisation in terms of redefined roles and responsibilities. It is critical that organisations ensure that role accountabilities, skills and competences are still aligned to the business. Roles that have not been reviewed and that may have become disconnected from the business will mean inefficiencies, lack of focus and frustrated employees.
As the recession begins to bottom out organisations will need to be proactive in ensuring that their people strategies can deal with an improving economy where pay budgets may still be tight and employee engagement weak but key employees will have improved alternative employment opportunities, said Carole Hathaway.
Mayor must act to help Londoners back into work
A new report from the London Assembly urges the Mayor to wield his skills and employment powers more effectively otherwise London will struggle to recover from the recession.
Unemployment in London has risen by 65 per cent during the recession and the report warns that a skills shortage threatens Londons long-term prosperity.
The report Time to Skill by the Assemblys Economic Development, Culture, Sport and Tourism Committee (EDCST) warns that the Mayor of London has not yet made the most of his recently acquired powers to influence resources for employment and skills in the capital. These new powers mean that the Mayor is uniquely placed to work with organisations responsible for service delivery for jobs and skills.
The report says there is a consensus about what needs to be done but that there has been little progress. It says that, while the Mayors skills strategy addresses some of the key challenges in the labour market and has the right ideas about simplifying skills provision in London, progress on actually reforming the system has been slow, and political leadership is fragmented.
The Committee is also concerned that although the Mayor announced the high-profile appointment of Lord Freud as adviser to head the Welfare to Work steering group in April 2009, the group has only met informally three times and the Mayor has not met Lord Freud since his appointment as adviser.
Dee Doocey AM, Chair of the EDCST Committee, said:
There is broad agreement on what needs to be done. The Mayor must use his new powers to get organisations working together to make skills training more available. The recession has really taken its toll and the Mayor is uniquely placed to help unemployed Londoners.
The Mayor has taken some positive steps through his skills strategy. But on the whole, progress to reform skills and employment services has been disappointing.
Time to Skill maps the drastic increase in Jobseeker Allowance (JSA) claimants in London over the past year. It finds that the impact of the recession has been most severe in inner and East London, where unemployment was already high. However, London boroughs with relatively low levels of unemployment before the recession have seen the largest percentage increases. In boroughs such as Bexley, Sutton and Richmond-upon-Thames, unemployment has more than doubled.
The report also highlights a skills shortage, particularly in managerial and professional occupations, and warns that failure to meet the growing demand for high-level skills could result in long-term damage to Londons economy. The report suggests that around half of jobs in London will require degree-level qualifications by 2020.
The reports recommendations include:
The Mayor must revisit his Economic Recovery Action Plan to address the increased JSA caseload in some boroughs
The Mayor and the London Skills and Employment Board should encourage the London Development Agency, Jobcentre Plus, and the Learning and Skills Council to prioritise joint commissioning for services that provide skills for people who have experienced long-term unemployment.
The Mayor must appoint a full-time adviser from within his team to enhance influence over employment and skills policy.