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Morgan McKinley Says Majority of City professionals forecast compensation to remain flat

Morgan McKinley Says Majority of City professionals forecast compensation to remain flat

2013 Salary Survey highlights:

&middot         57% of professionals expect base salaries to stay the same, while 67% think that temporary/contractor rates will remain the same in 2013

&middot         In the permanent recruitment market, 33% anticipate salaries rising by up to 10% and in temporary/contract hiring, 28% expect rates to rise by the same amount

&middot         Attracting and retaining the best people is the main reason compensation is forecast to rise for permanent and temporary employees.  However, temporary/contract professionals also highlighted skills shortages as a reason for rates increasing

&middot         Only 3% think base salaries will fall, mainly due to cost pressures while temporary/contractor rates are not predicted to decrease in 2013 at all.

London Employment Monitor December 12 highlights:

&middot         The London Employment Monitor registered a monthly decrease in job vacancies of 36% in December 12

&middot         Compared to December 11 this was a drop of 24% in newly available roles

&middot         The number of job seekers entering the hiring market fell from November 12 to December 12 by 25%

&middot         This was also a 50% decrease on the number of job seekers registered in December 11

&middot         Professionals securing jobs in December 12 saw their salaries rise by an average of 7% compared to November 12.

Contractors less confident pay will rise

In December 12, Morgan McKinley carried out its annual Salary Survey with over 500 financial services professionals working across London.  The survey identified that overall, compensation is predicted to remain relatively flat with 57% of professionals in the permanent hiring market and 67% of the temporary/contractor market expecting remuneration to remain the same in 2013.  However, 33% of those professionals operating in permanent hiring expect pay rises, but only by up to 10%. Respondents in the contractor market again showed slightly less confidence with only 28% forecasting that rates might rise and again only up to 10%.  Despite this, there was confidence in the contractor market that pay rates will not decrease at all over the course of 2013.

Of those who expected compensation to increase this year, attracting and retaining the best talent in the market is predicted to be the key reason according to 48% of those in the permanent market and 33% of temporary/contracting professionals.  In addition, another 33% working across temporary/contracting recruitment cited skills shortages as a reason for pay rates rising.

Hakan Enver, Operations Director, Morgan McKinley Financial Services commented:“It’s interesting that this survey shows a high number of professionals anticipating that compensation in their organisations will at least remain flat this year or rise by 10%.  In contrast to this, the average salary change for new joiners over 2012 was 14%, therefore suggesting that talent attraction really was and continues to be a key focus for employers.

“Looking back to our 2012 London Financial Services Salary Survey, the responses are broadly comparable, suggesting that economic instability and performance challenges faced by many organisations in 2012 will see compensation remaining similarly restrained over the course of this year.”

Job availability dips in seasonal slowdown

The London Employment Monitor registered a fall of 36% month-on-month in December 12 from 2,079 to 1,323.  Compared to December 11 this was a decrease of 24% from 1,733.

The number of active job seekers also fell in December 12 from 3,886 to 2,915 a decrease of 25% on November 12.  This was 50% lower than the 5,802 job seekers in the market in December 11.

Hakan Enver continued:“As usual at this time of year, seasonal factors have affected the hiring market, illustrated by the lack of both new jobs being released and the fall in professionals seeking new roles. However, from speaking to those with hiring responsibility across the sector, there is expected to be a significant amount of recruitment activity likely to take place during January 13. This will not only consist of roles that have been open since the start of Q4 which still need to be filled, but also new jobs which will only be released once 2013 budgets are confirmed and resource requirements for the year have been reviewed. 

“There has also been a noticeable trend whereby due to the numerous restrictions imposed by various banks, some hiring was postponed at the end of 2012 so that headcount could fall into the new calendar year. Based on this, we also anticipate that job volumes will rise in January 13 and then level out over the remainder of Q1.

“The fall in job seekers that we have seen in December 12 is again no surprise.  In this climate there are two camps of job seeker.  The first is those considering their company and team’s performance over 2012 and determining if a bonus is likely. For employees not expecting much reward, this may encourage them to & lsquo;jump ship’ to kick start their careers in the New Year.  The second group is those who are in line for greater reward who will stay put with a view to considering new opportunities once they have collected their bonus payment for 2011/12.

“Looking back over the year, 2012 was more subdued than 2011 in terms of total job availability. However, bearing in mind continued instability across Europe, as well as a number of trading irregularities and more recent concerns over the US & lsquo;fiscal cliff’ situation, the hiring market seems to have maintained a reasonably even pattern. Rather than anticipating a sudden surge of growth in hiring as we did in 2010, we now identify consistency as a key determinant of the financial services jobs market moving forwards – although at a slower and more fragile pace.”

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