Now that Morgan McKinley has been measuring job opportunities in the London financial services sector for eight years, we are well positioned to illustrate the meteoric rise of the financial services hiring market, followed by the dramatic effects of the credit crunch starting in 08 (Chart 1). Comparing 2011 to the previous year shows that job opportunities fell by 8% and a much larger 43% drop compared to 2006 when financial services hiring was peaking. This pattern of hiring strongly reflects the shape of the global economy over these years.

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Returning to December 11 – job availability was at its lowest monthly level for the whole calendar year. This is partly because December typically sees a fall in job opportunities as it is a shorter working month due to the festive period. However taking this into account, December 11 represented an even greater slowdown than expected in financial institutions’ hiring activity across London. As mentioned in previous Employment Monitors, onging issues in the eurozone, compounded by turbulence in financial markets sent shockwaves through financial institutions in Q3 11 and Q4 11, rendering the hiring market very subdued, particularly in the wind down towards Christmas. Sentiment from hiring managers remained highly cautious in December 11, influenced by well-documented volatility across financial markets plus announcements of potential lay-offs. This has had a clear effect on professionals’ confidence in the jobs market, with a 40% drop in those who were active in the hiring market in December 11

The increase in the time taken to fill job opportunities from 55 to 61 days – the longest period since February 11 – highlights the challenges that exist in managing professionals through the process of securing a new role. Whilst it is usual to see recruitment processes in some institutions speed up to get key hires on board towards the end of year, evidence in December 11 points towards the opposite with even longer job sign-off and interview processes. As we have noted previously, the City hiring market thrives on confidence, and there is currently a distinct lack of confidence amongst hiring managers.

Referring back to the last eight years of the London Employment Monitor, we look with interest to see how 2012 will pan out. Anecdotal evidence from the City’s major employers indicates that the first half of 2012 may be slightly better than H1 11, but visibility remains limited. Looking at recent history, even in the ‘rebound’ year of 2010, the overall volume of jobs released (61,671) was so far below 2007 job numbers (114,471) that it begs the question we are regularly asked: will London financial services hiring ever return to the same level of activity.

Employment, Financial Services, Financial services in London, Financial services UK