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London experiences a decline in financial services jobs

The advice for companies would be to continue investing in talent as required – it is at times like this, the best individuals on the market can be available.

Markets advance as weak US data soothes taper worries
© AFP Kazuhiro NOGI
© AFP Kazuhiro NOGI

According to the Morgan McKinley London Employment Monitor the number of jobs and job seekers in the City’s Financial Services sector have declined over the course of 2023. This signals a change in London’s position on the world financial stage.

According to the company’s recruitment monitor, there was a 16 percent decrease in job seekers and 38 percent decrease in jobs available compared to the previous year.

Hakan Enver, Managing Director, Morgan McKinley UK explains in a statement sent to Digital Journal: “London witnessed an employment shift when it came to financial service jobs in the City from 2022 to 2023. Job opportunities experienced a decline by 38 percent in 2023 compared to the previous year. 2022 saw a very competitive job market propelled by a robust year of wage expansion; however this changed quickly in 2023 with indications of a market slowdown influenced by the high interest rates, inflation, shortage of workers and uncertainty around the world following the post-pandemic boom and geopolitical conflicts.”

The Monitor records a sharp 42 percent decrease in jobs in Q4 2023 compared to Q4 2022, one of the largest falls recorded in recent years. After a year of strong pay growth and over-hiring driven by a tight labour market, signs of a cooling market have emerged.

This is apparent in a decrease in job seekers, candidate supply and the number of jobs available. Employer confidence receded amid the sustained economic slowdown and conflict in the Middle East, prompting spending and hiring to be reined in.

This in turn has led to hiring freezes, redundancies and job cuts across financial services. In 2023, global banks cut more than 60,000 jobs, undoing the hiring trends that followed the COVID-19 pandemic, and marking one of the most substantial years for cuts since the global financial crisis, leading to an influx of job seekers in the market.

In another sign of change, during Q4 2023, the average salary change for a finance professional moving from one organisation to another was 14 percent. This reflected a 6 percent decrease from the previous quarter, and contributed to an overall decline of 16 percent across the whole of 2023, in contrast to 22 percent in 2022.

This change suggests less urgency to bring in talent, with business leaders now far more focused on cost reductions and improving cash flow. However, the challenge with this is that as the market begins to improve the same problems will exist with companies all looking to compete for the same skill sets. In turn, this competition drives up salaries, and the cycle repeats.

This prompts Enver to says: “The advice for companies would be to continue investing in talent as required – it is at times like this, the best individuals on the market can be available.”

Enver adds: “Despite facing robust economic headwinds as it entered 2024, the UK economy received a boost with the recent government commitment to invest £320 million in domestic science and technology startups. Additionally, Rishi Sunak unveiled £29.5 billion in funding for “innovative” projects, solidifying the UK’s reputation as “one of the best places in the world to do business.” In the Autumn statement, UK Finance Minister Jeremy Hunt pledged tax cuts for businesses, a reduction in National Insurance contributions, and a reform of the welfare system aimed at increasing employment among the unemployed. The new year brings hope as an estimated four billion people across the world will be able to vote in presidential, legislative, and local elections. Over 60 countries intend to hold these elections, including the EU, UK and USA, which will inevitably bring about change.”

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Written By

Dr. Tim Sandle is Digital Journal's Editor-at-Large for science news. Tim specializes in science, technology, environmental, business, and health journalism. He is additionally a practising microbiologist; and an author. He is also interested in history, politics and current affairs.

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