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Tough times within London’s financial services jobs market

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Hiring within London’s financial services industry continued to slow. During August 08, hiring in the sector slowed considerably as turbulent conditions within the global financial services market had a marked impact on activity levels in what is traditionally one of the quieter months of the year for recruitment activity. The number of new job vacancies within the City of London fell by 34% during August 08 compared with the same month the previous year (August 07). This was also a decrease of 20% versus July 08. 

The number of individuals registering for jobs throughout August 08 was down by 37% on August 07 and 22% versus July 08 as individuals saw the reduced activity levels within the City as a good opportunity to take their full summer leave.   

Robert Thesiger, CEO of Morgan McKinley’s parent company, Imprint, commented: “Following the collapse of one of the financial services industry’s major institutions at the weekend (13th and 14th September 2008), it is evident that the fallout from the credit crisis is not over. These momentous events of the last few days have changed the landscape of not only London’s but also the global financial services sector. It is probably fair to say, therefore, that the period of transition that will now follow will create an equally challenging and nervous environment within financial services and the recruitment market within this sector. 

Aside from these recent events, the August hiring market statistics again show that the financial services industry continues to face significant challenges. Within the recruitment market, the tougher conditions were magnified during August as activity levels slowed and more financial services workers took their vacation. As a result, new job volumes and the number of individuals looking for new career opportunities were considerably reduced.”

During August 08, the average City salary was £50,429 and remained relatively steady registering a 2% decrease compared with the same month the previous year (August 07). This was also a 6% drop on July 08. According to a survey of 161 financial services hiring managers, conducted during August 08, 59.2% said they expected their company’s bonus pot to be smaller than 2007.

However, a related survey of 144 financial services professionals, conducted during the first week of September 08 and before the recent turmoil on Wall Street at the weekend, found that almost two thirds (63.5%) expect their next bonus payment to be similar (46.1%) or higher (17.4%) than the one they received last year. This demonstrates a significant disparity between employees’ bonus expectations and the positions of their employers.

Furthermore, 77.9% of City workers say they will either definitely (42.5%) or maybe (35.4%) change jobs if their bonus expectations are not met in the next bonus round.

Thesiger concluded:“The survey shows that at the beginning of September, those people who had perhaps met their individual or team targets at this point in the year, were optimistic about their bonuses. However, as always, it is important for them to remember that overall company profits play the main role in deciding the size of the bonus pot. Over the next three and a half months City employers will need to manage employees’ bonus expectations carefully and this will have just been made easier for them by the events at the weekend. Clearly bonus expectations for 2008 will be markedly reduced by the turmoil witnessed in the past few days.”

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