Finance vacancies plummet amid Covid-19 and Brexit
The number of new jobs in financial services has plunged to its lowest level in more than three years amid the double whammy of Covid-19 and a looming Brexit, the Morgan McKinley Spring London Employment Monitor reveals.
Less than 2,500 new financial services positions became available in the City in the second quarter of 2020, down from almost 7,400 at the same time last year, a 66% decrease.
However, there are glimmers of recovery. There was a 72% increase in jobs available in June – and the financial sector is primed to be among the most resilient. Typically accounting for around 7% of the UK’s total GDP, research indicates that the historically conservative financial services industry has been a leader in the move to digital.
Hakan Enver, managing director Morgan McKinley UK, commented: “Covid-19 will no doubt affect the movement towards a digital landscape. However, the ability to pivot and adapt to major infrastructure change stands as a hopeful mark of survivor potential.
“If any industry will make it through the devastation of the pandemic, finance may well be it. Recruits will need both institutional knowledge and strong technical skills. Companies with an eye on strategic goals in these areas may want to take advantage of a buyer’s market.”
The Bank of England’s Monetary Policy Committee kept interest rates at a low of 0.1% with inflation remaining under the bank target of 2%, alongside a rescue package with tax relief, loans, and salary support. By June, the double impact of fallout from Brexit issues and the Covid-19 pandemic prompted an increase in quantitative easing, bringing the total to £745 billion.
Enver said: “These figures shed light on the magnitude of what the government has had to do to protect financial services alongside the UK economy and what needs to be done to allow a quick recovery. Finance minister Rishi Sunak laid out provisions for another £30 billion coronavirus stimulus package targeting Britain's growing jobs crisis. On the other hand, the UK government's furlough scheme, which affects approximately nine million workers, will begin paring back in the Autumn if no further government support is allotted. Despite the easing, stimulus and other efforts as lockdown restrictions are relaxed, consumer demand remains down.”
Covid’s impact on productivity and sales resulted in immediate cost cutting measures for many organisations, which in turn resulted in a drop in average salary increases being offered to prospective employees. During April, the average salary change was 6%, which was the lowest on record, according to the Morgan McKinley report. This jumped back up to 22% in May, some weeks after lockdown, once business activity was able to settle and resume accordingly.
Photo courtesy of Canva.com