London sees 52% decrease in jobs MoM, Morgan McKinley reveals
Morgan McKinley has released its London Employment Monitor for December 2017.
Christmas brought with it the standard seasonal mix of business closures, holiday absences, and bonus waiting. Nevertheless, December 2017 was markedly more depressed than previous Decembers. In both 2015 and 2016, the December month-on-month decrease in jobs available hovered around the 30% mark, figures that are considerably less dramatic than the 2017 month-on-month decrease of 52%. Similarly, the year-on-year decrease in jobs available dwarfs preceding years’ figures. Whereas in 2017, jobs to market were down 37% from December 2017 - 2016, December 2015 to December 2016 saw a 16% year-on-year increase. “In December, the City is abuzz with holiday parties not hiring, so a drop is to be expected, but for it to be such a seismic drop is alarming,” said Hakan Enver, operations director at Morgan McKinley Financial Services.
On the job seeker front, a reverse trend is visible in the month-on-month data. The 40% decrease in 2017 roughly corresponds with previous years: 2016 saw a 46% decrease and 2015 a 32% decrease. It is in analysing the year-on-year figures that the full impact of the 2017 Brexodus comes into stark relief with its 30% plummet as compared to a 7% decrease in 2016 and an 11% increase in 2015. Enver commented, "Brexit clobbered the City's workforce in 2017. Anyone sticking it out into 2018 is in it for the long haul.”
Given the scale of Brexodus and the ongoing SOS signals being issued by financial institutions who are reluctant –but willing– to leave London, the perpetual disarray of EU divorce talks is an uncomfortable but persistent status quo that businesses continue to grapple with. Largely lost in the din of Brexodus alarm bells was a signal that the government is proactively responding to employers' concerns: Minister of State for Immigration & International, Brandon Lewis, tweeted that the issuances of skilled worker visas was up by 38% and that the number of tech visas had doubled. "It's a victory for business that the government is prying the door to Britain back open,” stated Enver.
Contrary to this however, a recent survey by BDO of more than 10,000 people around the world, showed the UK dropping out of the top six countries for potential migrants from the EU. “On the one hand, it’s great that the UK is still being considered an attractive destination from countries outside of the EU. However, on the other hand, there are signs that European employees are becoming less captivated by the draw of working in this country" said Enver.
Though relentlessly rocky, the Brexit path has remained navigable for British businesses which are impressively well positioned for a successful 2018. For the first time, Britain topped Forbes’ prestigious ranking of best country in the world to do business. The findings cite continued economic growth and record unemployment among core indicators of a strong economic climate, as well as its technology readiness. Further, the report noted that countless businesses, including technology giants Facebook and Apple, have moved or are moving part of their operations to London.
Adding weight to the case for an optimistic outlook for the year ahead is the UK’s unparallelled financial services sector, which exports more services than the United States and Switzerland combined. “It’s clear to all involved that hurting London’s financial services ecosystem might bring short term benefits to a handful of locales, but would send devastating shockwaves across the industry,” said Enver.
Indeed, the economy remains largely at the mercy of Brexit talks. “2017 was the year we were told we’d have an exit strategy and a transition plan. We have neither,” said Enver. “As new rounds of talks kick off, let’s hope 2018 brings the much needed clarity and stability everyone’s waiting for.”
The average salary increase for a professional moving from another institution to another was 14% in December 2017. Excluding July’s average, this was the lowest salary change witnessed during the entire year. “Much can be attributed to an uptick in mid-tier moves, those earning salaries in the range £48k to £65k. Those on higher bases were more likely to wait until they pick up their bonuses in the first quarter of 2018 before entertaining a move elsewhere,” said Enver.
Financial services institutions are poised to take on cryptocurrency in 2018, taking Bitcoin mainstream. Given its astronomical boom, regulators will likely seek to dampen Bitcoin speculation. Such a move could entail a short term drop in value, but the currency is expected to be a windfall for asset managers worldwide. “As the world's leading tech-savvy financial services hub, London is looking at a potential gold rush. That's good news for employers, for professionals, and for government coffers," concluded Enver.
Photo courtesy of Shutterstock.com
Photo courtesy of Shutterstock.com