London slump: financial jobs down 38 per cent in a year
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Key stats from Morgan McKinley’s 2023 London Employment Monitor:
- 38% decrease in jobs available year-on-year (2023 vs 2022)
- 42% decrease in jobs available year-on-year (Q4 2023 vs Q4 2022)
- 16% decrease in job seekers year-on-year (2023 vs 2022)
- 15% decrease in jobs seekers available year-on-year (Q4 2023 vs Q4 2022)
- 16% average salary change moving from one job to another in 2023
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The latest employment figures from Morgan McKinley suggest that the number of jobs available and job seekers in the City’s Financial Services sector have declined over the course of 2023 . According to the company’s recruitment monitor, there was a 16% decrease in job seekers and 38% decrease in jobs available compared to the previous year.
Hakan Enver, Managing Director, Morgan McKinley UK commented: 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% 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 saw a sharp 42% decrease in jobs in Q4 2023 compared to Q4 2022 - we haven’t seen a drop of this magnitude for a while. After a year of strong pay growth and over-hiring driven by a tight labour market, signs of a cooling market emerged as we approached the end of a challenging year. We saw an 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 resulted in hiring freezes, redundancies and job cuts across financial services. In 2023, global banks slashed 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. For now, the labour market remains competitive with an increase of 55% of job seekers since 2019 due to redundancies and cost of living.”
"During Q4 2023, the average salary change for a finance professional moving from one organisation to another was 14%. This reflected a 6% decrease from the previous quarter, and contributed to an overall decline of 16% across the whole of 2023, in contrast to 22% in 2022. This softening 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 (as early as H2 2024), 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. 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.”
“Looking back to 2019, the number of jobs available in the City is on par following the tenacious rebound of significant hiring growth from the COVID-19 lows. There is a recurring two to three-year cycle, excluding 2018 with increases in 2007, 2009/10, 2012, and 2015 (approximately every three years). Although 2018 deviated from this pattern, there was another prosperous year in jobs in 2021. The subsequent decline raises the possibility that 2024 may mark the next cycle of increase.”
Enver concluded: “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.”