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Over half of new financial services jobs based outside London up from 20% pre-credit crunch

Over half of new financial services jobs based outside London up from 20% pre-credit crunch

•              London’s top spot in UK financial services job market eroded by financial institutions making cost-cutting office moves to smaller cities

•              Edinburgh is UK’s Second City for financial services

More than half (55%, 24,667) of all new financial services jobs are based outside of London up from approximately 20% before the credit crunch, according to research from BrightPool, the specialist financial services recruiter.

BrightPool says that the findings are evidence that London’s dominance of the UK financial services jobs market is being eroded by cost-cutting measures undertaken by financial services institutions who are increasingly setting up new offices outside London.

Angela Hickmore, Managing Director, BrightPool, says: “Since the credit crunch retail banks and insurance businesses have been aggressively targeting opportunities to save money by moving middle office units, such as credit checking centres, to areas with a cheaper workforce. That’s had a big impact on the UK financial services jobs market.”

“It’s not just through off-shoring that financial services businesses can save money.”

“Whereas previously retail banks would only consider moving process centres and call centres to the regions, in the last few years they have been moving increasingly high value work from London to reduce costs.”

“Wages in London are on average 30% higher than in the rest of the UK. So banks can make a significant dent on their cost to income rate just by moving more jobs outside London.”

According to BrightPool the Top Three UK cities outside London for financial services jobs are:

1.             Edinburgh (1,995 new job vacancies in April)

2.             Manchester (1,992 new job vacancies in April)

3.             Leeds (1,602 new job vacancies in April)

(Full results below)

Edinburghstrengthens position as UK’s Second City for financial Services

Angela Hickmore, Managing Director of BrightPool, says: “Edinburgh in particular has become something of a powerhouse in retail financial services. It is a location of choice for new start-up banks, such as Tesco Bank and Virgin Money. It has also been chosen as the location for the Government’s Green Investment Bank.”

According to BrightPool, Edinburgh is also a top choice destination for financial services companies looking to relocate middle office functions, with recent examples including:

•              BNY Mellon

•              State Street

•              BlackRock

Angela Hickmore continues: “Edinburgh is probably the most popular location in the UK for financial services start-ups because it can draw on plenty of well qualified staff but the cost base is much cheaper than London. Over the last ten years, it has strengthened its position as the UK’s & lsquo;Second City’ for financial services.”

BrightPool says that Edinburgh has also seen high demand for contract workers due to the many financial services change projects being implemented there.

Says Angela Hickmore: “The retail banks in Edinburgh have been extremely busy with major service improvement projects, such as implementing new customer facing technology to distinguish them from competitors and preparing new product launches. These kinds of large scale projects create a lot of temporary jobs, from project managers to technology experts.”

Financial services investment in Manchester NOMA redevelopment

BrightPool says that investment by financial services firms can have a major impact on the City in question, with the new &pound800m NOMA redevelopment in Manchester by the Co-operative Group a good example.

Angela Hickmore comments, “The Co-operative Group has deep roots in Manchester. Its current investment in Manchester goes further that the bricks and mortar going into the NOMA redevelopment. The whole group is restructuring in response to the site move and that’s generating a huge amount of demand for contract and part time workers to assist with the transformation.”

UKfinancial services outsourcing but not off-shoring

BrightPool points out that the relocation of middle office functions outside London but within the UK shows that financial institutions will avoid moving work off-shore if savings can be found within the UK.

Adds Angela Hickmore: “Financial services businesses watch their cost base very closely, but they are very careful to weigh up all the factors when making an outsourcing decision. Many UK banks and insurers have made a strategic decision to shift jobs out of London but within the UK rather than overseas if possible.”

“That is good news for employment within our major regional centres.”

UK’s Top Ten cities for jobs in financial services*

Cities      Jobs

London  45% (19,888)

Edinburgh              4% (1,995)

Manchester          4% (1,922)

Leeds     4% (1,602)

Birmingham           3% (1,440)

Bristol    3% (1,383)

Glasgow3% (1,115)

Southampton        2% (1,067)

York       2% (980)

Liverpool               2% (730)

UKTotal72% (44,555)

* Based on new financial services jobs in April 2012.


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