Vacancies & jobseeker numbers maintain upward curve following New Year surge
On a year-on-year basis, however, available positions were down by 6% on February 2013 figures.
Professionals actively looking for new positions numbered 8,844 in February 2014, from 8,328 in January 2014 – a 6% increase month-on-month. Year-on-year data indicates a considerable 68% hike in job seekers, as City workers continue to feel confident about the prospect of securing new roles.
Hakan Enver, Operations Director, Morgan McKinley Financial Services, commented,
“After a marked surge in City recruitment in January, this month’s monitor has continued to register an upward curve, with 8,442 available vacancies – a healthy figure in the shortest month of the year. It’s evident that, on the whole, firms remain confident to hire and importantly, they are continuing to create new positions rather than simply taking on replacement hires. This confidence is in line with reports showing continued momentum behind the country’s economic recovery. Markit, for example, recently announced that British manufacturing activity in February expanded faster than in all of its major European peers, while increasing numbers of manufacturers are bringing production back to the UK, attracted by Britain’s technical advantage. Meanwhile, the Bank of England has declared that January mortgage approvals were at their highest level in six years, another sure sign that the economy is picking up steam.
In terms of London’s financial sector, the improving IPO market is one factor fuelling jobs growth. Recent weeks have seen a procession of companies lining up to float on the London Stock Exchange. This surge to capitalise on a buoyant equity market spells good news in terms of jobs creation, and will have a positive knock-on effect as far as hiring in the rest of the financial services sector is concerned.
Elsewhere, operational risk also kicked off the year with a strong appetite to hire and February continued this trend across both buy and sell side institutions. Many clients have been hiring at all levels, across contract and perm, with the main requirements to bring on operational risk practitioners who have a mix of framework design and implementation, ICAAP and ILAA experience. The requirement from the PRA and FCA for firms to further develop their risk frameworks and make them more robust is still a priority.
As we reported last month, generally we’re seeing a strong uplift in the contract jobs market, as City hiring managers seek to test the water. On the other hand, the permanent jobs market remains slightly more challenged and particularly slow to hire – often hiring managers will see 10-15 candidates in order to provide a benchmark and will then be required to go through a repeat sign off process once they have found the right person.
Despite a generally positive picture, as ever there are two sides to the coin, with a significant proportion of firms still cautious about investing in human capital. In particular, companies with high exposure in emerging markets appear the most hesitant to make any imminent increases to their headcount. While some organisations are waiting until the bonus period is completed to start hiring, others are more nervous, especially in light of recent redundancy announcements made by many of the major UK banks. This is coupled with growing uncertainty over the Ukraine crisis – for example, in the past week alone, we’ve seen Russian firm Lenta Ltd’s share price slumping just days following flotation, and an overall stock market crash triggered by question marks over potential trading sanctions with Russia. Continued volatility will cast a shadow over an otherwise positive outlook.
On the candidate front, the increased numbers again indicate that individuals are being more proactive about making a move now that the economy is more stable, particularly if one looks to the year-on-year rise of 68% in job seekers. February’s jump of 6% is indicative of candidates looking for new opportunities having collected January bonuses and we predict more movement in the market over the next month as more firms’ bonus periods come to an end.
Looking ahead to the rest of 2014, we predict City firms will continue to add to their head count, particularly within the asset management arena, which, as reported last month, has been buoyed by a strong pension fund market. However, the impact of turbulence in emerging markets remains to be seen. The Ukraine situation could easily create a snowball effect, throwing the financial sector back into the doldrums of the Lehman Brother days.”
Salary a strong motivating factor for job seekers
The average salary increase for those securing new jobs in February 2014 was 15%, compared to 20% in January 2014.
Enver continued, “Despite a slight drop from the previous month, a 15% rise in average salaries is still enough to tempt individuals away from an existing position. Combined with the increase in candidates looking for roles, firms are going to need to put remuneration strategies in place in order to retain their talent – with bonus pots significantly reduced, they will need to look at boosting the base salaries on offer to top performers. Without these key staff, troubled institutions will struggle to recover.”