Slow start to September jobs market, says Morgan McKinley
“August was a surprisingly quiet month, which trickled through to September,” says Hakan Enver, operations director for Morgan McKinley Financial Services. “After the holiday season, things were unusually slow to get going. We only started seeing a pickup in activity during the second half of last month. This explains the monthly decrease in jobs.”
During the last couple of months, HR approval turnaround times have increased, in some cases taking as long as four weeks to complete. Job seekers with the necessary skills find themselves in demand and are - more often than not - choosing the employer who is quickest to make an offer. Therefore, the slower employers are finding it harder to recruit the best talent.
“I can understand why it makes sense for job seekers to go with the more active and willing employer. Institutions who show a keen interest and are in a position to commit are seen by job seekers as dynamic places to work,” said Enver.
He added, “Overall it’s been a very strong year for jobs growth. On the back of such a strong year, I expect growth to flatten out towards the end of this year. We’ve seen some large institutions make significant cuts and with the market volatility of last summer still fresh on everyone’s mind, it’s expected that employers will be a little more cautious in the final quarter of this year."
Wages increases across the board, led by financial services
The strong increases in wages we have been reporting throughout the past two quarters, continues. Despite reports of slowing growth within financial services, wages continue to surge as financial services lead the recovery in jobs. Association of Professional Staffing Companies reported that wages in financial services are up by nearly six percent this year, with accountants, IT staff and marketing executives being highly sought after. In comparison, Morgan McKinley’s data shows that in September, on average, those moving jobs within Banking and Financial Services, secured a 20% increase in their basic salary.
London overtakes New York
In recent Employment Monitors, we have highlighted studies that have placed London as the finance capital of the world. In yet another survey, London trumps New York as the world’s number one financial centre. The annual Global Financial Centres Index ranks 84 global financial centres by surveying over three thousand executives. In 2014, New York had been ranked top by the index, but this year London came in first, despite the headwinds of the Scottish referendum and the uncertainties around the general election.
It’s not all plain sailing
Regardless of the positive wage growth and London’s strengthening hold as the top place on the globe for finance, September did raise some areas of concern. After only three months at the helm, Deutsche bank’s new CEO, John Cryan, appears to be shaking things up. According to Reuters Deutsche bank is going to cut a quarter of its workforce, which would affect over 20,000 employees of the banks.
In September, the UK Labour Party chose Jeremy Corbyn as their new leader. Corbyn is seen by many as a traditional left wing politician, with some of his most vocal critics even calling him a radical. It is therefore not surprising that business leaders are voicing concerns about the future. In a poll conducted by the Supper Club, a business network for companies with a turnover in excess of £1 million, 44 percent of entrepreneurs said they would leave the country if Corbyn came to power. While these types of politically charged comments can often be heard when a leader with strong political convictions is chosen, it does highlight the strong concerns of the UK business community about the direction of the largest opposition party.
Events in China have rocked markets in the recent months and weak factory and service sector data for August (published in September) sent ripples of concern through the markets. It is feared that a slowdown in the Chinese economy could affect global markets and therefore, stall hiring within the financial sector.
The Chinese equity markets have seen plenty of headlines, but the fixed income market has also been hit with investment grade outflows at nearly $4 billion and high-yield bond outflows at nearly $5 billion in the last week of August.
“We see this as a growth issue rather than solvency, and more specifically Chinese growth impacting risk appetite globally,” said Chris Bowie, a London-based portfolio manager at Twentyfour Asset Management, which oversees 4.9 billion pounds ($7.5 billion). “August is notoriously illiquid which can mean bigger price swings when there is market-moving news.”