Morgan McKinley London Employment Monitor - March 2009

"Monitoring the pulse of the City job market"

Bonuses in London’s financial services sector down on previous year but majority still received a payout, survey finds

 

Highlights

• Almost three out of four (73%) financial services professionals working in London received a payout in the 2008 bonus round
• Of those who did receive a bonus, the majority (59%) said it was lower than last year’s amount while 33% claimed it was at least similar (17%) or higher (16%)
• The main reason cited for the lower payouts was that employers had implemented an across the board reduction in bonuses within their firms
• During March 09, there were 10% more new job vacancies in the City compared with the previous month (February 09).
• This was the third consecutive month of uplift in new job numbers
• However, this was still 57% fewer new job opportunities than a year ago (March 08)
• The number of financial services professionals who began their search for a new role during March 09 increased by 9% versus February 09, but was down 26% on the same month the previous year (March 08)
• The average City salary registered £52,122, a 5% increase on March 08.

 

Survey reveals London’s financial services professionals still received bonus payouts for 2008 despite market turmoil

The majority of London’s financial services professionals did receive a bonus in the latest bonus round, according to a survey of 200 London financial services professionals conducted by Morgan McKinley in March 2009. However, the amount most individuals received was lower than last year.

Almost three out of four (73%) financial services professionals surveyed said they received a bonus in the latest bonus round but 59% stated it was lower than their payout the previous year. Survey respondents said the key reason for the reduction in their bonus payout was because their employer had implemented an across the board reduction in bonuses.

Despite this, one in three (33%) respondents still said their bonus was similar (17%) or higher (16%) than the amount they received for 2007.

 

Andrew Evans, Managing Director of Morgan McKinley comments: “Speculation surrounding the health of the 2008 bonus pot was enormous given the turmoil within the financial services sector last year and the subsequent write downs which occurred. It is fair to say that general sentiment within the industry was that bonus payouts would be significantly down on the previous year or not be paid at all. 

“This research highlights the inevitable; that there were some individuals who didn’t receive a bonus because they were either made redundant or their firms completely cut the bonus pot. The majority of London’s financial services professionals who were fortunate enough to receive one though saw their payouts reduce in size compared to what they received the previous year. There were still some people who received their full bonus or a payout that was higher than last year.”

 

New job vacancies rise for the third consecutive month

The first quarter of 2009 showed some signs of an increase in confidence levels within the City of London as hiring activity rose slightly for the third month in a row. During March 09, the number of new job vacancies within London’s financial services sector increased by 10% compared with the previous month (February 09). However, compared with last year, recruitment levels were still considerably reduced, falling 57% versus March 08.

The number of financial services professionals who began looking for a new job also rose during March 09, registering a 9% increase on February 09. Compared to the same month the previous year (March 08), the number of financial services professionals entering the jobs market was still down 26%.

 

 

Andrew Evans, Managing Director of Morgan McKinley comments: “During the first quarter of 2009, there has been a slight improvement in City confidence in comparison to the end of last year and this has translated into a small increase in hiring activity. Similarly, many of the cost saving and efficiency initiatives being implemented by financial institutions over the past three months are nearing completion. Therefore, employers are now more accurately able to identify where there are skills gaps in their workforce and are starting to hire again to fulfil these requirements, albeit at reduced volumes compared with 12 months ago.

“Nevertheless, while there have been three consecutive months of increases in City recruitment activity this year, April 09 will not necessarily continue this trend as it is traditionally a slower month for recruitment due to the Easter break. Likewise, it will be interesting to see what effect this week’s budget announcement will have on confidence levels amongst City institutions and their employees and in turn what impact this will have on hiring and compensation in the City of London in the medium to long-term.” 

Average City salary

The average City salary rose 5% compared with the same month the previous year (March 08), to £52,122. This was also a 3% increase on February 09.

Chart 1: New candidates v. new jobs

Chart 2: Average City salaries

 

-ENDS-

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Note to editors:

Statistical methodology

Survey results

Morgan McKinley conducted a survey amongst 200 financial services professionals working within investment banks and financial services institutions in London between 24th – 28th March 2009. The aggregated results of this research are used in this edition of the Morgan McKinley London Employment Monitor.

 

Salaries

Annual salaries are based on confirmed placements by Morgan McKinley in a particular month. Salaries are segregated into three pay groups:

• Support and administration: Secretaries, receptionists, statistical assistants, administrative clerks, settlement clerks, fund administration, trade support, graduates, client services (salaries ranging from £10,000-£34,000)
• Middle market professionals: HR officers, junior analysts, project managers, financial controllers, product controllers, portfolio analysts, business analysts (salaries ranging from £35,000-£60,000)
• Directors and senior professionals: Corporate finance, bankers, fund managers, senior analysts (salaries ranging from £61,000+)

 

Monthly new jobs and new candidates

These are based on Morgan McKinley’s own weekly records of new permanent job vacancies and new candidates registering with the firm for permanent employment. Statistics for the full market are derived using Morgan McKinley’s market share.

 

About Morgan McKinley
Morgan McKinley is the leading specialist in banking and financial services recruitment.  Morgan McKinley offers a diverse range of solutions tailored to each client’s individual requirements. Morgan McKinley is the preferred supplier for over 200 financial institutions in the City.
 
Services include Contingency & Retained, Temporary & Permanent and Campaign Recruitment in the following areas: Alternative Investment, Accountancy and Banking Finance, Banking Operations, Commodities, Credit, Global Custody, Human Resources, Investment Administration, Investment Banking and Capital Markets, Investment Management, Legal and Compliance, Private Wealth Management, Risk Management and Quantitative Analysis, Secretarial and Support.
 
Morgan McKinley is a fully owned subsidiary of Premier Group, which comprises Accreate, Brunel, ECHM, iQ selection, la crème, Morgan McKinley, Nigel Lynn, Premier Finance and Verkom. The Group has 24 offices across eight countries.