MORGAN MCKINLEY LONDON EMPLOYMENT MONITOR

London Employment Monitor August 2015 highlights:

• Decrease of 5% in available jobs month-on-month
• Year-on-year figures for available jobs showed a 30% increase
• Jobs seekers decreased month-on-month by 4%
• Year-on-year job seekers increased by 105%

Volatility returns

Chinese equities fell off a cliff in August causing markets across the globe to dip resulting in a spike in volatility, unseen since 2009.

“August was a testing month,” says Hakan Enver, Operations Director, Morgan McKinley Financial Services. “Next year’s edition of the Oxford Dictionary, should have ‘Financial Markets, August 2015’ as the new definition for the word ‘volatility.’”

Whilst the global equity sell-off did not have an immediate impact on the jobs market during August, normally the effects of any market turmoil are felt typically with a three to six month time lag. “If the market continues to stay in the red for the next few months, then we would expect it to show in hiring later on in the year. For now, it’s only a single month event,” continues Enver.

In the employment numbers, year-on-year growth remained strong with a 30% increase in available jobs and a 105% increase in those seeking new employment. “Overall, as the yearly numbers show, confidence remains positive for both employers and job seekers,” says Enver. “The massive increase in job seekers shows that people are confident they can improve their compensation packages. We’re also seeing banks recruiting for riskier projects, which indicates a need and an appetite for new talent from employers.”

Month-on-month, both professionals and job seekers showed a small decrease, 5% and 4% respectively. The monthly drop is due to seasonal factors – namely summer holidays. The same trend that was evident in July continued throughout August, with hiring managers choosing not to delegate their hiring to colleagues, but rather choosing to postpone the hiring process until their return. “We expect a bounce back in September as schools start up and people return to work again. Not to mention the number of interviews already pipelined for the first half of September that were pre booked from as early as the first week of August!” says Enver.

London top of European financial centres despite regulation fears

London is Europe’s number one financial centre according to research published byTheCityUK. During the first three months of 2015, The London Stock Exchange accounted for nearly a third of total funds raised in Europe. London also leads Europe in mergers and acquisitions, with the UK accounting for 41% of Europe’s total deal values.

Despite the strong showing for the City of London amongst Europe’s financial centres, banking leaders in the UK are voicing concerns about the march of regulation causing damage to the UK’s competitiveness. In a poll conducted by Interim Partners, nearly two thirds of finance executives said that new rules are negatively impacting the UK’s international standing as a financial centre.

Banks warn of threat to banking jobs

Strategists from Deutsche Bank warned in a morning note that the breakdown of China’s currency peg bears a resemblance to the events of 1998 that saw the collapse of currency pegs in Asia, Russia and Latin America, resulting in the losses of thousands of banking jobs across the globe.

The Times newspaper also reported that Barclays is planning to cut more than 30,000 of its staff within two years, as it considers accelerating a cost-cutting programme following the departure of Chief Executive Antony Jenkins.

Shanghai’s Black Monday wipes out this year’s gains in Europe

China’s sell off in August gripped the rest of world markets. Not even blue-chip stocks were safe as they lost over a trillion (pound sterling) in market value in a single day. The VIX index, a widely followed measure of market volatility often referred to as the “fear index”, shot to above 50, a number not seen since early 2009. “With such a prolonged period of low volatility behind us, August was a reminder to all market participants what volatility in action is really like,” says Enver.

The volatility rocked markets across the European continent, wiping out nearly all the gains made in 2015, resulting in the worst month for European equities in four years erasing over 5 trillion in pound sterling from European stocks.

“Chances that volatility stays high are probably higher than we would like them to be,” said Andreas Nigg, head of equity and commodity strategy at Vontobel Asset Management in Zurich. “The issues at hand, especially the slower growth in China, are still here. We may have seen the worst of the correction, but the bottoming out process after such high volatility usually tends to be bumpy.”

Economists in the UK remained calm despite the headline grabbing market sell-off. Whilst China has been a growing trade partner for the UK, it accounts for only 3% of all UK direct exports. The relative ease with which UK economists view the events of August can be explained with the positive macro figures that have been coming out of the UK throughout 2015.  This offers some comfort that the impact of this may not be as detrimental to the hiring market in London as some may assume.

Average salary increases

The average salary change continues to be in favour of the candidate, despite the slight fall in average compared to the previous month.  “A finance professional can still demand on average a minimum 17% salary increase based on August’s data, by moving from one job to another” says Enver.

Middle and Back Office Operations, Financial Services

Ian Filmer, Manager (Operations), Morgan McKinley Financial Services says, “As we approach the end of Q3, management begin to plan for the new year. We have seen the majority of hiring activity in the junior to mid level client services area. There have been stringent budgets for additional headcount, hence most employers have been forced to aim for a more affordable option but with a long term investment. In August, there was an influx of Client Reporting candidates looking for a new position across Asset Management, leading to an increase in vacancies as well. These roles ranged from £35,000 to £45,000.”

“Performance has consistently been a busy area throughout the year and shows no signs of slowing down. These vacancies have ranged from junior (£40,000) to senior analyst positions (£60,000 – £80,000). The roles have been frequent, however, that candidate pool is extremely limited. Those in Performance positions are well settled and don’t want to move unless the opportunity is too good to turn down. Vacancies have only come about due to candidates moving abroad for personal reasons or a move to Front Office has beckoned. Liability Driven Investment (LDI) is a growing market and specialist performance LDI roles have been common. This again is a limiting factor as LDI experience is rare.”