Summer 2020 London Employment Monitor: COVID-19, The Ultimate Stress Test, Makes Recruiting Highly Skilled Talent In Finance More Critical Than Ever

Morgan McKinley Summer London Employment Monitor reflects negative impact of the COVID-19 pandemic on jobs.

London Employment Monitor Summer 2019 highlights:

• 60% quarter-on-quarter decrease in jobs available 
• 66% year-on-year decrease in jobs available
• 32% quarter-on-quarter decrease in job seekers
• 15% year-on-year decrease in job seekers
• Salary change - 13% quarter on quarter

Morgan McKinley’s Q2 Summer London Employment Monitor details City hiring trends from April through June 2020. The second quarter (Q2) of the year saw decreases in terms of jobs available and professionals seeking jobs. In April, there was a 72% year-on-year decrease in the number of vacancies with only a 1% decrease in job seekers across the period. By the end of the quarter, the number of jobseekers had climbed 19%. June, however, brought a 72% increase in jobs available. 

Hakan Enver, Managing Director, Morgan McKinley UK commented: “The UK, like many other nations, went into lockdown during mid-late March and many industries bore the brunt of the early impact on revenue. As the number of COVID-19 cases grew, the FTSE experienced major falls and the UK economy shrank 20% by April. We haven’t seen anything anywhere near that magnitude of contraction for a long time, not even during the credit crisis where the economy didn’t shrink more than 1%. The free flow of goods, services and people across borders was unstoppable and it all came to a halt.”

Enver continued: “Predictably the yearly quarter-on-quarter job numbers were down 66%, along with the number of job seekers falling, but not nearly as dramatically, registering a fall of 15%. Working from home had its benefits, with professionals more open to look for new opportunities. As the months passed, working from home became the norm and by June, the number of job vacancies available increased by 72%. Businesses recognised that investing in talent continues to be a main driver for survival, recovery and future growth.”

Quantitative Easing and Stimulus

The Bank of England’s Monetary Policy Committee kept interest rates at a low of 0.1% with inflation remaining under the bank target of 2%, alongside a rescue package with tax relief, loans and salary support. By June, the double impact of fallout from Brexit issues and the new COVID-19 pandemic prompted an increase in quantitative easing, bringing the total to £745 billion. 

Enver commented: “These figures shed light on the magnitude of what the government has had to do to protect financial services alongside the UK economy and what needs to be done to allow a quick recovery. UK finance minister Rishi Sunak laid out provisions for another £30 billion coronavirus stimulus package targeting Britain's growing jobs crisis. On the other hand, the UK government's furlough scheme, which affects approximately nine million workers, will begin paring back in the Autumn if no further government support is allotted. Despite the easing, stimulus and other efforts as lockdown restrictions are relaxed, consumer demand remains down.” 

Finance: Ready to take on a Post-Pandemic Future?

Financial services, typically around 6.9 percent of the UK's total GDP, was in the midst of critical change before COVID-19. Research indicates that the historically conservative financial services industry has been a leader in the move to digital. 

Enver continued: “COVID-19 will no doubt affect the movement towards a digital landscape. However, the ability to pivot and adapt to major infrastructure change stands as a hopeful mark of survivor potential. If any industry will make it through the devastation of the pandemic, finance may well be it. This achievement will not likely be possible without finding and retaining talent. Recruits will need both institutional knowledge and strong technical skills. Companies with an eye on strategic goals in these areas may want to take advantage of a buyer’s market.”

Average Salary Change

During Q2 2020, the average change in salary of those moving from one job to another was 13%.  There is no doubt that COVID’s impact on productivity and sales resulted in immediate cost cutting measures from many, which in turn resulted in a drop in average salary increases being offered to prospective employees.  During April, the average salary change was 6%, which was the lowest on record. This did jump back up to 22% in May, some weeks after lockdown, once business activity was able to settle and resume accordingly.