Brexhaustation overwhelms City Employment

Morgan McKinley London Employment Monitor provides insight into city employment statistics from February 2018

London Employment Monitor February 2018 highlights:

  • 3% increase in jobs available, month-on-month
  • 14% decrease in jobs available, year-on-year
  • 20% decrease in professionals seeking jobs, month-on-month
  • 35% decrease in professionals seeking jobs, year-on-year
  • 13% average salary increase for professionals moving from one institution to another

February sees modest uptick in jobs

February saw a 3% month-on-month rise in financial services jobs coming to the market. Year-on-year, however, the numbers decreased by 14%, signalling a stubborn lethargy in City hiring. It was the third year in a row where employment numbers in the new year—a traditionally busy hiring season—were flat.

“More jobs to market is great, but it’s disappointing not to have a stronger start to 2018,” said Hakan Enver, Managing Director, Morgan McKinley Financial Services.

Professionals seeking new opportunities were down dramatically: 20% month-on-month and 35% year-on-year.

“10,000 fewer people were looking for new financial services positions in February of this year than in 2016,” said Enver.

“Numerous factors are impacting this lack of desire from professionals to search for new opportunities. A small proportion are still waiting for bonus season, which typically falls at the end of the first quarter.

“Added to that, more and more EU nationals are returning back to their home nations, therefore, reducing the overall numbers of people searching in the London markets. Clearly there is a lack of confidence for some in securing a new role; nobody wants to be told that, three months into a new job, it may be relocated abroad.“

Redundancy announcements raise concerns

In February both Lloyds and Deutsche Bank announced redundancies that will impact their London workforce, though to what extent remains unclear. Lloyds is looking to eliminate some 1,000 jobs in London, but expects to add over 400 back. The Deutsche Bank figures are less precise: 250-500, to be felt in both New York and London.

“While these are not insignificant numbers, they’re a normal part of the financial service business. Job loss through attrition currently remains a bigger threat to City employment than restructuring” said Enver.

Employers uncertain about plans to release new jobs

A February study by The Recruitment & Employment Confederation found that employers are stuck in hiring limbo. Among companies with over 250 employees, 47% reported not knowing whether or not they will step up or reduce their number of agency workers in the next three months.

The study also found that, across the board, uncertainty has risen from this time a year ago with 18% of employers reporting not knowing about their medium-term plans for permanent workers, up from 10% in February 2017. “Employment has been rising for the past year. However, we are now seeing that businesses are starting to feel hesitant about hiring,” said REC chief executive Kevin Green.

Office leasing hints at Brexit contingency plans

Reports suggest that Goldman Sachs is considering scrapping plans to move into its new European headquarters on Holborn Viaduct. The news raised questions about whether or not they are also considering cuts or relocations to their existing 6,000 London employees.

“The lack of clarity on Brexit has reduced us to reading real estate tea leaves to see what Brexit has in store for City employment. But even there, the messages are mixed,” said Enver.

Despite its best efforts, Paris has failed to attract City businesses: financial firms’ leasing activity in Paris was down in 2017 from the previous year. Frankfurt, however, is worth keeping an eye on: banks doubled their square footage in the German banking city from 2015 to 2017. But it seems London doesn’t have too much to worry about just yet, as it remained the leading city for financial services office leasing in Europe for the third consecutive year.

Everyone’s tired of Brexit

With one year left until Britain is scheduled to leave the European Union, fatigue over not knowing what the terms of the divorce are is palpable. “Everyone’s tired of fretting about Brexit and just wants to get on with it, but there are still too many unanswered questions holding businesses back. This is evidently showing in both jobs coming to market and those applying to them” said Enver.


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