Uncertainty over the pace of economic recovery led to a 19% drop in new vacancies in the City last month compared with April, a move deemed to be unusual at this time of year.
The figures produced by Square Mile recruiter Morgan McKinley are significant given that financial services was the first sector to go into recession due to the global credit crunch and the first to come out.
The sector accounts for 10% of gross domestic product and employs more than a million people out of a total UK workforce of 31 million, some 319,000 are based in London and 128,000 in the South East.
But Andrew Evans, Morgan McKinley’s chief operations officer, told the Financial Times that fewer people appeared to be moving jobs after receiving their bonuses – either because they were opting for job security or because deferred bonuses were encouraging them to stay in their present roles.
While pockets of the market were still seeing month-on-month increases in vacancies, “what is most striking is the speed at which the City jobs market appears to be affected by fluctuations in market confidence”, he added.
The number of new vacancies in May dropped by 19% to 5,229 compared with April and by 9% when compared with May last year.
A second survey undertaken by accountancy and finance recruiter Marks Sattin, meanwhile, revealed that financial services professionals expected to get an average pay hike of 13.5% or £4,900 this year in order to compensate for flat bonuses.
The move, which would come on top of an 8% salary increase last year, is estimated to cost employers £3.1 billion. The average wage in the sector rose by £2,700 to £36,400 in 2010, some £1,800 below expectations as personnel had expected salary increases of more like 13%.
As a proportion of salary, bonuses were flat, but because salaries were higher, the average worker took home 8% more, bringing their total renumeration to £43,300.
Dave Wage, Marks Sattin’s managing director, said: “To expect a 13.5% average salary rise may be excessive. The most recent GDP figures along with continuing public sector spending cuts have made the outlook for UK business far from certain. While there is plenty of room for optimism, it’s important not to get carried away.”
