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London City recruitment racing past pre-pandemic levels

The latest employment figures from Morgan McKinley suggest that City recruitment is recovering well from the Covid crisis and is on target to experience real growth in 2022. According to the company’s winter recruitment monitor for Q4 2021, there were over a third (40%) more jobs available compared to the same pre-pandemic period in 2019, and over a quarter (34%) more people looking for new job opportunities.

When annualised, the figures show a negligible change in total jobs available between 2021 and 2019, suggesting financial recruitment in London’s City hasn’t just returned to pre-covid levels but is on course to enjoy real growth.

Hakan Enver, Managing Director, Morgan McKinley UK commented: “The future is bright for City recruitment as the country starts to see the light at the end of the pandemic tunnel. With many companies getting their heads around working from home in 2021 and children back in school, we saw the sector grow beyond pre-pandemic levels by the end of last year.”

When compared to 2020, the figures show an industry that’s got back on its feet. In 2021, there were a total of 32,331 Financial Services jobs created in London, a 118% increase from the previous year and a 30% year-on-year increase in jobs seekers. The largest jobs increase came in Q2 2021, where there was a 211% increase in new jobs available compared to the same quarter in 2020. The monitor also showed recruitment activity dropped for Q4 compared to Q3 for jobs available (29%) and job seekers (12%).

Hakan continued: “Thanks to the UK’s vaccine programme and people returning to the office, London’s financial sector is strong and thriving, bouncing back from the poor showing of jobs across 2020. In broad terms, the job numbers continued to reflect an encouraging recovery from the impact of Brexit, furlough scheme, pandemic, and lockdowns.

“However, there was a drop in jobs available in Q4 due to two main factors. Firstly, the emergence of the Omicron variant and activation of Plan B created some uncertainty across businesses. Second, the reduced headcount due to more people taking their annual leave at the end of the year, and businesses closing early for Christmas.

“As restrictions eased in July and businesses went back to the office in September, there were spikes in professionals looking for a new job. With Covid-19 changing our day-to-day working lives, people are increasingly searching for work-life balance, more flexibility or for a job they can get more satisfaction out of. And they are not afraid of looking elsewhere for those things.

“With the increase in demand from companies looking to hire exceptional talent, this would naturally cause the price of hiring to increase. With slightly lower volumes of job seekers available compared to job opportunities, base salary increases held strong, as organisations tried their best to fend off the competition. The average change in salaries was comparable to those of 2018 and it is expected that they will remain as such through 2022 as competition for talent continues to dominate.”

The figures also suggest that the City has swerved much of the fallout predicted to result from Brexit.

Hakan said: “Back in 2016, there were numerous reports circulating that up to 100,000 jobs would be lost from the UK to the EU following Brexit. Five years later, this hasn’t happened and is likely never to happen in those volumes. Many institutions have either established a new entity abroad or enhanced their existing operations within a European jurisdiction. However, London continues to be a central location to conduct business.”

“According to the latest EY Financial Services Brexit Tracker survey, the number of relocations from London to the EU dropped year-on-year. Many investment banks have reconsidered their plans and as such reduced the number of roles they will eventually move. Covid has contributed to this with the concerns and restrictions around travel, particularly into Europe which has deterred many from relocating. The preference is to remain in London and consider an alternative role here, where the markets continue to be buoyant.”

Fintech has become an area which the UK leads on, similarly new areas are emerging including AI and green technology. According to Innovate Finance, investment into British fintechs jumped more than 217% to $11.6 billion in 2021, second only to US firms. The technology sector has seen £26 billion in venture capital, record London listings, more jobs and a rise in the number of British unicorns to 116.

Hakan concluded: “Long term, London will remain one of the main financial and technology hubs, as it continues to innovate and lead by example. Increased Fintech investment has shown the desire of businesses to continue trading and investing in London, with companies needing more trained technical and business staff. London is  still the first place of choice for financial and professional services. That said, as the cost of Covid becomes clearer and the UK faces higher taxes and inflation, we may begin to see a movement of jobs back out of the UK.”

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