Morgan McKinley London Employment Monitor - January 2008

London’s financial services professionals satisfied as bonuses meet expectations

Highlights

• 80% of London’s financial services professionals received a similar (43%) or higher (37%) bonus than last year
• 67% stated they were satisfied with their payout and 70% said their bonus either matched or exceeded their expectations
• This is against a backdrop of 71% of financial services employers stating their companies’ bonus pots were similar or larger than 2007
• New job vacancies fell 20% in Jan 08 compared to Jan 07 as market uncertainty led to a slower start to hiring for the year
• However, job numbers still showed substantial growth on Dec 07 figures, up 57%
• Typical of post-bonus season and consistent with the previous two years, the number of individuals wishing to change jobs rose in Jan 08, up 11% on Jan 07 and 87% on Dec 07
• Basic salaries increased across all levels with the average salary rising 5% on Jan 07 to £53,246.

Bonus payouts: The round-up

The credit crunch does not appear to have affected bonus payouts by London’s financial services institutions as strongly as predicted, according to research by Morgan McKinley. 71% of financial services organisations surveyed stated their companies’ bonus pots were similar or larger than 2007 and 80% of financial services employees in the middle and back office stated that they received a similar or higher bonus to last year. 20% received a lower amount.

London’s financial institutions look to have managed bonus expectations well with 70% of employees claiming their bonus this year either matched or exceeded their expectations and the majority were satisfied with the payout they received (67%).

Robert Thesiger, CEO of Morgan McKinley’s parent company, Imprint Plc

comments: “Following on from a record bonus round in 2006/2007, speculation surrounding this year’s bonuses was enormous, particularly given the significant volumes of write downs by banks in the last quarter of the year. However, putting the impact of the credit crunch aside, 2007 was still a strong year for financial services and for the majority, bonus payouts in middle and back office functions appear to reflect this.

These findings show that most employees received a similar or higher bonus payout than last year and while there are always some exceptions, there does not seem to be large scale discontent amongst financial services professionals. Investment banks have managed expectations well.”

Skills shortage continues into 2008

Due to uncertainty caused by the credit crunch and the volatility of world markets in the last quarter of 2007 and into 2008, banks have taken a more cautious approach to hiring at the start of the year as new job vacancy figures highlight. In January 08, new job numbers were down 20% compared to the same period 12 months ago, although month-on-month job growth continued, up 57% on December 07 levels.

On the flip side, seasonal fluidity within the candidate market has begun earlier than usual this year as recent market uncertainty has prompted individuals to test the temperature of the job market pre-bonus payouts. Consistent with the previous two years, the number of new candidates increased in January 08 compared with December 07 (up 87%) and on January the previous year (up 11%). This led to new candidate numbers overtaking new job numbers last month. However, these rises are not at the levels recorded over the same period last year (December 06 - January 07), which saw individuals looking for a new role increase by a staggering 128%.

Robert Thesiger, CEO of Morgan McKinley’s parent company, Imprint Plc

comments: “The ‘wait and see’ approach currently adopted by many banks has translated into a slower start to hiring this year. As I’ve said previously, we are not going to have any clear view on how the 2008 financial services hiring market is going to shape up until the end of March, post-bonus season and once the ‘credit crunch’ has worked its way fully through the system. Only then will organisations feel more confident forecasting growth plans for 2008 and beyond.”

Salary increases indicate a skills short market

Whilst the flow of individuals looking for new career opportunities may have increased substantially in January 08, wage inflation suggests that it is still a skills short market with the availability of those individuals with the right skill sets remaining tight. The average salary rose by 5% on January 07 to £53,246, a 7% increase on December 07.

-ENDS-

Further press information:

Alexandra Fleming
Tel: +44 (0)20 7438 3154
Email: afleming@morganmckinley.com

Alternatively, please contact the Press Office on +44(0)207 092 0260.

Note to editors:

Statistical methodology

Survey results

Morgan McKinley conducted a survey amongst 120 HR and line managers within leading investment banks and financial services institutions in London between 14th – 18th January 2008. 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.