London Employment Monitor: London’s Financial Services Sector Bucks the UK’s Labour Shortage Trend

Morgan McKinley’s Q3 London Employment Monitor reveals two applicants for every job available.

Autumn Highlights:

• 10,059 new jobs available since Q2 (29% growth q-on-q)
• 21,100 job seekers in Q3 (a 47% increase q-on-q)
• 164% year-on-year increase in jobs available
• 52% year-on-year increase in job seekers
• 22% salary increase 

The latest figures from Morgan McKinley’s Autumn London Employment Monitor reveal that the city's Financial Services industry is having a strong third quarter. The Monitor, which launched today, suggests recruitment activity has surged again this quarter amid reports of greater demand for staff and the return to normal business conditions as, London fills up again.

According to the Monitor, the number of jobs available in London’s Square Mile has grown to 10,059 since Q2, while applicant numbers have also grown quarter-on-quarter to 21,100. The figures are a strong indicator of the sector’s resilience against the labour shortages seen elsewhere in the UK, with two potential applicants for every job vacancy.

Hakan Enver, Managing Director, Morgan McKinley UK commented: “The Square Mile is back in business - socialising, commuting and face-to-face meetings are back on the cards as Londoners return to the office. Professionals looking for a new job were at their highest level since pre-COVID-19, wiping out the effects of Brexit, pandemic uncertainty and the furlough scheme. Candidates are now confident to seek out new opportunities and not worry about being last in, first out.”

Year-on-year, the figures are also very positive. The number of jobs available has grown by 164%, while job seeker numbers have also seen substantial growth with a 52% increase on this time last year.

Hakan continued: “Despite the strong uptick in both vacancies and job seekers, the sector can’t afford to become complacent. The jobs market is overflowing with opportunities for candidates and employers are fighting harder than ever for the right talent. The challenge of hiring and hanging on to the best people continues to be a top priority for many businesses as they realise that the cost of losing an employee is more than offering a salary increase. Candidates can be difficult to find in certain areas with an increasing skills shortage especially in cybersecurity, software development and data, which have all seen huge demand over the last 18 months.”

“This period of time has made us think about what our colleagues do when they are together. Networking, learning, career progression, brainstorming, fear of missing out and friendships will bring people back to the office. If businesses want to retain the loyal talent they need to stay competitive and adapt quickly. The office has a very important role in the future, but it’s going to have to be much more flexible,” said Hakan.

The UK remains an attractive hub for tech entrepreneurs, and has solidified its reputation as one of the best destinations to start and scale a tech business. Despite the challenges being faced both globally and nationally in the UK, there has been a surge in applications for the UK Global Talent Visa in the past year, which will help the sector gain further momentum.

Hakan concluded: “There is still a long way to go, but the last quarter has really felt like it’s back to school. We hope to see a continued steady rise as we move into Winter. Staff shortages will put constraints on the economy, restricting growth and innovation, so it’s vital we solve them quickly.”

Average salary

The average salary change for someone moving from one company to another in Q3 rose to 22%; the highest since Q3 2018. In July 2021 alone, it peaked at 27%, the highest month since Morgan McKinley’s records began.  

Hakan commented: “There is no doubt the post-COVID recovery has created competition for talent and therefore, resulted in salaries increasing. That said, a number of individuals are choosing to stay in their current roles, until at least bonus season has concluded, but those that are more open to moving now, are benefitting from considerably higher compensation packages.”