January sees 138% MoM London job seeking hike
January jobs figures came in much stronger than expected, according to the latest Morgan McKinley London Employment Monitor.
The survey found that available jobs grew by 115% month-on-month to 9,180, however on a year-on-year basis, this was virtually flat with a very small decrease of 1%. Job seekers were particularly active in January, showing an increase of 138% month-on-month to 16,924, this was an increase of 67% year-on-year.
“In complete contrast to the financial markets, January was a very strong month for jobs,” said Hakan Enver, operations director of Morgan McKinley Financial Services. “Hiring activity fell off a cliff in December, and similar to last year’s month on month trend (where it showed a 100% increase), the bounce back was expected. However, the strength of this increase, considering the current sentiment, does come as somewhat of a surprise.
"The last quarter of 2015 had been weak, with volatile markets and reported redundancies causing a flat demand in hiring. “Many employers put the brakes on in the latter part of 2015, choosing to wait until the new year before kicking off the process once again. With this raised demand for talent, so we’re now seeing increased pressure for employers to speed up the sign-off process.
“As with the financial markets, it’s also been a volatile few months in the jobs market. January’s numbers showed that businesses are continuing to pay for talent and that professionals are on the move.”
According to Morgan McKinley, the bad start to the financial markets took control of the financial news cycle in January. Driven by oversupply of oil and concerns over a global slowdown the markets dipped in January amid strong volatility, with China even entering bear territory. In the UK alone, £113 billion was wiped off the FTSE in just ten days making it the worst ever start to the new year for the index.
In contrast, Morgan McKinley claim that the market could get some much needed support from a long list of planned mergers and acquisition activity. Last year, according to Ernst & Young, there was a record $516 billion of deals done in London, up 90% from the previous year. The drop in equity prices and in the sterling against other major currencies, could be a further supporting factor in bringing more deals to the UK.
Figures published in January by the ONS showed that unemployment in the fourth quarter of 2015 reached its lowest level in a decade at 5.1%. Pay, excluding bonuses, was up 1.9% coming in just ahead of analyst’s expectations. The employment figures are supported by the views of UK business bosses, who are keen to hire new staff in 2016 as the economy continues to grow. Financial services firms, the most active on the hiring front, are faced with challenges in finding the right talent. This is good news for job seekers, as vacancies in financial services are up 16% on the year, and over 60% of executives expect to hire more staff in 2016.
A study conducted by the CBI and PwC reported stronger than expected growth in the financial services sector in the fourth quarter of 2015, with 45% of businesses reporting an increase in business versus 22% reporting a loss. Looking towards the first quarter of 2016, 30% of businesses expected volumes to grow.
The overall positive employment data is supported by reports in increases in salaries for the financial services sector. When it comes to advertised pay for example, the Association of Professional Staffing Companies found an increase of 11% for consultant roles and 10% for banking jobs, well above the 1.9% in pay growth mentioned above.
Despite the growth in salaries for financial sector workers, it isn’t doing much to alleviate the costs of living in London as increasingly younger bankers are finding it hard to pay the capital’s expensive rents. Despite salaries being approximately 30% more than the national average, they are not able to keep pace with the rise in rental costs. According to government data, rent in the capital is up to three times higher than that in the Northeast for example.
Enver commented, “Combine this with graduates entering the City, heavily in debt from tuition fees unable to have been funded through university by their parents. Already carrying such a huge debt burden, they will also face the prospect of having to pay large rents to live in London. It cannot be easy for the Gen Y’s.
“January has been a great month for job seekers. We’ve actually seen double digit growth in salaries for those we’ve successfully found a new opportunity for. In January, the average salary change for someone moving to another organisation was +18%. Clearly, professionals with the right skillset are able to demand a premium. If organisations are not forthcoming with salary negotiations to those that can clearly demonstrate their value to a firm, they will be better off elsewhere.”