MORGAN McKINLEY LONDON EMPLOYMENT MONITOR January 11
MORGAN McKINLEY LONDON EMPLOYMENT MONITOR January 11
Monitoring the pulse of the City jobs market
Nearly two thirds of financial services managers expect salary offers to rise in 2011, while only a quarter predict higher bonus payouts
H1 2011 Salary Survey Highlights
In a survey of 200 HR and line managers working across financial services in London, 62% expect basic salary offers to increase in 2011, with 55% expecting the rise to be no more than 10%
In addition, 31% of respondents expect temporary/contract rates to increase by the end of the year, with only 27% expecting the rise to be no more than 10%
The key driver for salary increases is anticipated to be the need to attract and retain key staff, according to 56% of respondents
Over a quarter (27%) anticipated that bonuses paid out for 2010/11 would be higher than 2009/10
Employment Monitor Highlights
January 11 saw job opportunities increase by 142% following a drop in December 10
Compared to January 10 the number of jobs increased by 28% in January 11
The number of professionals entering the jobs market also rose by 76% month-on-month in January 11
Compared to the same time last year, January 11 saw a 64% rise of professionals new to the jobs market.
Modest rise in basic salary offers expected
As part of Morgan McKinleys Salary Survey: Financial Services, London 2011, 200 HR and line managers were surveyed between 8th-22nd December. The findings revealed that 62% of respondents expect basic salary offers to rise over the course of 2011 compared to last year, with the majority (55%) expecting the rise to be between 1-10%. Less than a third (31%) anticipated that temporary/contract pay rates will increase this year, while 37% expect market rates to stay the same. The majority (27%) expect the increase in temporary rates to be no more than 10%.
The key driver for the anticipated increase in salary offers is the need to attract and retain top staff. This is underlined by the largest number of respondents (37%) identifying that competitors poaching employees is the main personnel concern their businesses will face in 2011. For the 12% who feel that salaries might decrease, the main reason cited was a focus on cost management.
Ahead of the 2010/11 bonus round, 27% of respondents expected that bonus payouts would be higher than the 2009/10 bonus round with 38% anticipating that they would be at a similar level.
Andrew Evans, Chief Operations Officer, Morgan McKinley Financial Services commented:
This month we have issued our first London financial services salary survey since the downturn which includes a comprehensive guide to basic salaries across the financial services sector. The survey highlights that nearly two thirds (62%) of respondents expect basic salary offers to rise. This is further evidence that salaries for high demand roles are rising as institutions gear up to compete against each other to secure top talent for 2011 and beyond. The anticipated rise in salary offers echoes the recovery that we have seen in the market over the last 12 months, however it is expected by most respondents to be between 1-10% suggesting that managers still feel an element of caution with respect to the market.
In contrast, only 27% of respondents expected bonus payouts for 2010/11 to be higher than the previous year. Public pressure to review remuneration within financial institutions and recent regulatory changes have led to restructuring of compensation packages across the sector over the past year. As a result of this, our survey shows only about a quarter (27%) of respondents expect 2010/11 bonus payments to be up on the previous year and many professionals are less able this year to predict the size of their bonuses.
Job opportunities increase significantly following December dip
The London Employment Monitor shows a significant month-on-month rise in the number of job opportunities coming onto the market, with an increase of 142% from 2,457 in December 10 to 5,935 in January 11. There was also an increase compared to the same month last year, with new job opportunities rising 28% from 4,646 registered in January 10.
The number of new professionals entering the jobs market also rose following the Christmas and New Year break, rising by 76% from 6,270 in December 10 to 11,060 in January 11. Compared to the 6,760 professionals looking for new roles in January 10, there was an increase of 64% in January 11.
The average salary for those securing new job roles in January was 53,046. This was 7% lower than the average salary for professionals finding new positions in December 10, however it was 5% higher than January 10. This is in line with the expected increase in salaries predicted by managers in Morgan McKinleys Salary Survey.
Andrew Evans continued:
The London Employment Monitor in January 11 registered a significant increase in the number of roles coming onto the market in the financial services sector with an increase of 142% month-on-month. This is very similar to the seasonal pattern from December 09 to January 10 when job opportunities rose by 105%. January 11 saw a greater increase in job volumes as Q4 10 was particularly subdued due to economic factors possibility of a double dip recession and debt concerns, which limited confidence and visibility within the hiring market. Tied in with seasonal factors and particularly bad weather in December 10, hiring activity slowed considerably ahead of the anticipated increase in January 11. The size of the increase was always open to speculation, and its pleasing that January 11 has shown job opportunities to be at their highest across the sector since March 10.
As expected, the number of professionals also rose in January 11 from a significant drop off in December 10 and also saw a rise compared to the same time last year, indicating renewed confidence in the financial services jobs market. This is typical of the beginning of the New Year, when people start to think about new career opportunities or prepare to move on once they have received their bonus payments in Q1.
Its encouraging to start the year with job opportunities on the rise and an increasing number of professionals in the hiring market. Both are strong indicators that we are likely to see a healthy level of hiring activity in the market over the quarter and potentially beyond. The expectations from our survey respondents of increased salary offers, also suggest a more positive outlook for the financial services sector in 2011 to the extent that competition for talent is set to become a key issue in certain areas of the market.