“Monitoring the pulse of the City Jobs Market”
Job availability in the City up 15% year-on-year
Active jobseekers in the City down 11% year-on-year
London Employment Monitor May 2014 highlights:
Regulatory burden prompts talent war and salary boom for specialists with the right skills
The May 2014 London Employment Monitor registered a 15% year-on-year increase in City job availability, with 7,410 vacancies, compared to 6,426 recorded in May 2013. Month-on-month data shows a decrease of 17% in May 2014 compared to April – when 8,955 vacancies were available – which can be attributed to two bank holidays and employees taking extended leave around school half term.
In terms of individuals actively seeking employment, seasonal factors also had an impact – 4,911 candidates were recorded in May 2014, a fall of 32% compared to April’s 7,263 total. Year-on-year, job seeker numbers were also down, with an 11% drop in those pursuing new roles, compared to May 2013 when 5,487 active job-hunters were reported.
Hakan Enver, Operations Director, Morgan McKinley Financial Services, commented:
“As we predicted in last month’s monitor, the two May bank holidays did have a negative influence on recruitment, with many key staff taking advantage of the opportunity to book extended leave, particularly given the school half term. However, the annual data proves that City job availability continues to move in the right direction, with job numbers up a healthy 15% compared to this time last year. This mirrors the latest data from the ONS, which shows UK employment rose at a record pace in the three months to April, as well as figures from the CBI and the British Chambers of Commerce (BCC), indicating economic growth for 2014 is set to reach its highest rate since 2007, at 3.1%. Our experience is that City firms are feeling confident to bump up both contract and permanent positions, while bringing many previously off-shored roles back in-house.
UK employment rose at a record pace in the three months to April.
In terms of the areas where hiring is currently most buoyant, we’ve seen a significant uplift in regulatory roles within the Accounting and Finance space, particularly for accounting policy specialists with Basel III and CRD IV experience. The reason for this is that banking organisations continue to come under fire from the Financial Reporting Council. Many banks are also failing to conduct strong enough internal audits. City institutions are definitely feeling the pressure in this area, as regulators ramp up fines for firms who fail to comply, and analysts believe penalties will be twice as high as predicted a year ago. At the same time, there are huge skills shortages in this sector, and banks are doing their utmost to keep the specialists they already have, as it is more cost effective than hiring new staff. The deficiencies across internal auditing are also impacting elsewhere, with the various banking regulatory bodies currently crying out for expertise to conduct inspections within City institutions. As a consequence, salary levels in this area have risen massively, with firms vying for the best talent. Hiring managers are having to consider other ways to tempt their key staff to stay put, such as incorporating variety and fresh challenges into roles.
We’ve seen a significant uplift in regulatory roles within the Accounting and Finance space, particularly for accounting policy specialists with Basel III and CRD IV experience.
Alongside this, we’re seeing significant growth within the valuations sector, where structured rates are experiencing high trade volumes, despite a number of banks highlighting reduced profits in their Fixed Income, Currency and Commodities (FICC) groups. Meanwhile, many of the product control roles that were previously off-shored are now coming back centrally. This is across the board, including structured rates, credit and equities. In terms of the areas where hiring activity has slowed down, the fall in bond trading has squeezed hiring in this space.
In terms of falling candidate numbers, aside from the bank and school holidays, there is also perhaps a sign that, following a surge in job seekers looking to jump ship on the back of strong economic recovery, things are now starting to settle down. With job seekers more thin on the ground, City recruiters will have to look at their own employer branding and the packages on offer in order to attract the best talent to then send on to their clients.
Going forward, we remain confident that overall job availability within the financial services sector will continue its upward trajectory, despite May’s seasonal blip. This view is reinforced by experts across the City, who in a recent Bank of England survey, reported that they were optimistic that the sector is in a good position to weather possible setbacks. The only real dark cloud is the burden of huge banking fines, which continue to increase at a rapid rate. While this is forcing firms to up their recruitment to ensure correct compliance, it could have a negative effect on hiring in other revenue and non-revenue generating business areas.”
Accounting and finance professionals gain in remuneration stakes as a result of skills shortages
The average salary increase for those securing new jobs in May 2014 was 15%, compared to 21% in April 2014.
Ever-tightening regulatory requirements placed on the banks, combined with major skills shortages, mean that accounting and finance professionalsare experiencing the most significant gains in terms of remuneration levels.Enver continued:
“Despite reports last month that salaries were at last outstripping inflation, recent data from the ONS suggests this trend was short-lived, with pay growth slowing down to 0.7% across the UK. In saying this, there still exists a high level of competition when it comes to onboarding niche skill sets. We are seeing multiple offers for candidates, and then a bidding war to get that employee’s commitment. As well as this, organisations are trying to throw everything at candidates to stay. After all it is more convenient to up someone’s base pay, but often it is too little to late by this stage.
Emolument's data below (Chart 4) shows the average salaries and bonuses for Accounting and Finance professionals across a number of banking institutions in the City. So whilst Director level compensation is increasing, the difference between CFO and Director remuneration is explained by the nature of that particular employer sample: CFOs completing the survey tend to work in smaller, independent organisations, while Directors are senior executives in larger corporations. Despite this, the ever-tightening regulatory requirements placed on the banks, combined with major skills shortages, mean that accounting and finance professionals, particularly accounting policy specialists, are experiencing the most significant gains in terms of remuneration levels.”