This seems to be a topic which is often covered in conversations within our office.

The compliance and regulatory markets have been growing at an alarming rate since the demise of Lehman Brothers and the start of the recession, and it seems whilst some other middle office functions have had steady growth, the compliance market has seen some astronomical growth, both within sell side and buy side organisations in London.

With the FSA introducing new policies and procedures on a regular basis, does this mean that the compliance markets are likely to continue growing for the foreseeable future?

Morgan McKinley has continued to see a demand for compliance ‘talent’ for the past three and a half years, especially within sales and trading compliance and Anti-Money Laundering (AML).

With the introduction of the new regulators in 2013, will this mean that the compliance market will continue to see growth above other markets? …I think so!

Banking, City of London, Compliance, Financial Services, FSA, regulation

Of course it’s positive to see our Employment Monitor registering an increase in job availability in January 12 after two months of declining hiring activity in the City.  However, it’s important to note that this is a very typical trend at this time of year with December being a shorter working month.  For the eight years that we have been recording job availability, January has always seen an increase in financial services hiring activity in London.

View full report

The number of jobs will also be boosted to some extent by roles that were signed-off but not released in December due to factors such as budgetary constraints. However, despite the fact that January shows a rebound, we have to put this into perspective; the total number of available roles in January 12 was just over half the number of January 11 which was in itself a relatively subdued month for hiring compared to previous years.  Despite the welcome monthly uplift, this 52% drop on the number of jobs in January 11 indicates we are still in a very cautious hiring market.

The rise in number of job seekers in the market in January 12 compared to December 11 again reflects the time of year. The ‘New Year, new job’ effect prevails to some extent every year regardless of economic conditions.  In addition, we are in the midst of bonus announcements, with expectations that many banks will be restricting the size of bonus pots to reduce costs and focus on other ways to attract talent.  Speculation and anticipation of unsatisfactory bonuses may have encouraged professionals to re-enter the jobs market in January 12.  However, as the distribution of bonus pots is unclear at this stage, it therefore also remains unclear whether bonus season will have the usual jobs merry-go-round effect.

The significantly increased time to fill roles reflects the environment in which organisations are currently operating; interview processes and headcount sign-off are quite clearly delayed for a number of reasons.  Firstly, finding the right person is absolutely paramount – each hire is crucial.  Secondly, negotiating and agreeing compensation and benefits packages is frequently taking longer with changes to the structure of remuneration within institutions and hiring managers facing cost pressures.  Thirdly, lack of visibility and confidence in the market means it can be genuinely difficult to determine the right person and the right time to hire.  The constantly changing landscape, particularly with respect to regulation also adds another layer of complexity.

We are definitely seeing the impact of this uncertainty reflected in the relatively active level of hiring activity for temporary and contract roles in financial services.  It’s encouraging to see these short term roles being released which suggests a need for skilled professionals, however it also points to a real ‘wait and see’ approach to hiring permanent employees.

Employment, Financial Services, jobs, jobseekers, London, London Employment monitor, Salaries, UK financial services professionals

Click to view the London Financial Services Salary Survey 2012

We recently surveyed over 370 hiring managers and professionals working across financial services in London to hear their predictions for hiring and remuneration for 2012.

Survey highlights show that only 12% of those in the permanent market are feeling more confident about job availability compared to this time last year. On a more positive note, just over a third (35%) are optimistic that salaries will rise over the course of 2012 while 50% expect salaries to stay at their current levels.

The mixed findings of our survey clearly reflect the lack of visibility and turbulence in the hiring market as the new year begins. It is well known that financial markets thrive on stability. Therefore a conclusion to the eurozone crisis and clarity on regulatory issues such as the Vickers report should bring greater transparency and confidence to the banking system in the UK.

We hope you find this salary survey informative and welcome your feedback. I would also like to take this opportunity to thank you for your continued support and wish you all the best for 2012.

Financial Services, London, salary guide 2012, salary survey 2012

From the credit crunch in 2008 to the eurozone crisis in 2011, risk management has never been so topical. This was evident last night, when more than 60 financial services professionals attended our exclusive risk debate at One Moorgate Place.

We were lucky to have some of the City’s most senior risk specialists in attendance, along with a distinguished panel consisting of a leading editor from a well known City newspaper, a senior risk representative from a UK regulatory body as well as a global head of risk methodology from a leading investment bank.  This all led to thought-provoking discussion and some sharp intellectual sparring! Abiding by the Chatham House Rule, I can’t tell you what was said, but here are some of the topics that were discussed. I’d love to hear some of your thoughts as well – let the debate continue…

1. Although numerous causes of the 2007/08 credit crunch have been mooted, many experts feel that the crisis was, “not a natural disaster, but the result of high risk, complex financial products, undisclosed conflicts of interest and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of major financial institutions.”
   
   Why was risk management not able to prevent such a global meltdown?

2. In recent years there has been major regulatory reform across the financial services sector, as well as a huge drive to ramp up risk management frameworks. Barely four years have passed since the last global economic crisis and we again find ourselves in another one, this time on a more sovereign scale with the eurozone crisis.
   
   Having concentrated on developing micro risk management tools, along with more in-depth analysis from a credit perspective, why is it that the macro-level risks were seemingly ignored?

With the new measures in place, do we now feel confident from a risk management perspective, that we are better positioned to recognise signs of an impending crisis? And what are the key areas to be wary of moving forward?

(L-R) Eduardo Epperlein – Global Head of Risk Methodology, Global Risk Management, Nomura, Allister Heath – Editor, City AM,  Michael Wardle – Head of Market Risk and Trading Review, FSA.

2012, Banking, Banking crisis, eurozone crisis, Financial Services, Risk, risk management

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.

View full press release >>

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

Our latest monthly London Employment Monitor – October 11 is now available with video commentary. Click below to watch COO Andrew Evans talk though October’s highlights.

Highlights:

• The Morgan McKinley London Employment Monitor registered a 0.4% increase in available jobs across London’s financial services sector in October 11 compared to September 11

• This represented a decrease of 22% from the same month last year

• The number of professionals entering the London financial services jobs market rose by 9% month-on-month in October 11

• Compared to October 10, this was an increase of 4% on the number of professionals looking for new roles

• The average salary for those taking up new positions in October 11 fell by 5% from September 11 to £52,601

• The time taken to fill new job roles decreased by 10 days to reach 53 days.

Click here to view the London Employment Monitor – Oct 11

Accountancy, accounting jobs, Asset management, banking and capital markets, banks, Canary Wharf, City of London, CVs, Employment, finance jobs, Financial Services, hiring activity, jobs, Jobs market, London, London Employment, Professionals, Salaries

3,843 newly available jobs in London's financial services sector

Morgan  McKinley’s latest monthly London Employment Monitor was issued earlier this week.  The Employment Monitor measures the number of jobs coming onto the market and also the number of job seekers entering the market.

In September 11, there was a further decline in the number of available job roles – 6% down on the previous month.  This reflects the uncertainty that is affecting the hiring market – Andrew Evans, Managing Director Morgan McKinley Financial Services commented on the hiring market being now impacted solely by current “economic and financial issues” and that “sentiment across London’s financial services sector remains extremely cautious.”

Two weeks into Q4 and it remains to be seen how the economic concerns of the world will change and what the subsequent impact will be on financial services hiring in London and beyond.

Click here to read the full London Employment Monitor – September 11

Andrew Evans, Financial Services, job roles, jobs, London Employment monitor

ICB Chairman, Sir John Vickers this week published a report which he feels will ultimately safeguard the UK banking system and separate the ’casino’ style risks the City has been perceived to be taking with domestic savings. Two of the main highlights of the report are: 1) ring-fencing domestic deposits and leading banking away from ’trading-book’ activity; and 2) increasing the capacity to absorb losses.

Ring-fencing

Separating retail banks and wholesale/investment banking divisions is a move seen to be protecting the taxpayer. The implications of this though are flexible and, somewhat murky at this stage as banks will be lobbying to understand exactly what levels of flexibility there will be. The fact that ’universal’ banks will no longer be able to cross-sell products to one anothers customers and in effect work in a ’third-party’ style of relationship will have a number of potential outcomes. This will also affect organisational structures as retail banks must now have boards of directors independent to investment banking divisions – in theory creating different company cultures.

This is one step removed from the separation of the universal banks, but in itself does also create opportunity. As organisations restructure, there will be opportunity for new talent to come in approaching things with fresh eyes and the potential to guide the implementation of the report’s recommendations and ensure the future rigour of the firm. We may see, new departments and role functions created to be the interface between the parts of the business either-side of the ring-fencing.

Increasing the capacity to absorb losses

Enhanced regulatory control over the sector is nothing new and it is important to remember that there are already measures in place such as Basel II and the subsequent implementation of Basel III.

The Vickers Report is suggesting that UK banks will need to exceed internationally agreed Basel III recommendations against risk weighted assets (RWA) to somewhere closer to 17-20%. This will have huge implications for the sector, particularly as banks are already struggling to raise capital in the current economic climate.

The impact of all this on the recruitment market may at first sight appear bleak, however there are absolutely opportunities for certain areas of the recruitment market to flourish through this transition period.

The demand for individuals with regulatory (Basel III), Capital allocation and RWA experience is already high and will now will go through the roof; creating more opportunities for people to enter this specialised area. As the importance of these functions is instilled throughout the industry, we expect to see more candidates seeing regulatory risk management as an area they can enter and continue to grow and develop their careers as the perception is they will always be in demand.

Summary

It is important to remember that this legislation will affect only the UK banks. There is a feeling that the Vickers Report could create a two-tier banking system. Banks that are affected by the ring-fencing will need to safeguard their staff from overseas banks operating in the UK as they will not be affected by the reforms. These firms may be seen as more attractive options to staff due to the comparatively lower amount of red-tape.

The next few months will be telling as banks will be lobbying hard to minimise the impact and cost of this legislation. There is still a large grey area in the policies outlined which will need to be clarified to ensure transparency throughout the industry.

The Chancellor George Osborne has vowed to give clarity on how this legislation will be put into place by the end of the year. Until then, we will all wait and follow with interest…

Banking, banks, Financial Services, legislation, profits, retail banking, Tax, Vickers, Vickers system

…and it got to mid season with a huge injury crisis, it would still remain top of the league.

If you have not already had a chance to read the latest London Employment Monitor for June 2011, then I recommend you take a couple of minutes to scan over it, as it throws out some very interesting facts.

We recently conducted a survey of 560 financial services professionals, and having posed a series of questions regarding working abroad, 80% of individuals said that they had not yet had the opportunity to move abroad, or if they had, had rejected the option based on a number of personal reasons, namely family, property, ‘too much hassle’ or simply London being the best place to advance their careers.

It’s comforting to see that such a high number is no coincidence. Following the threats over the last couple of years of businesses relocating their headquarters abroad due to tax reasons, the threat of more stringent regulation, or regional offices, in particular Asia, expanding their headcount due to economic growth, it is evident that London is still too high profile to witness a sudden exodus of financiers to other locations.

The London Employment Monitor also registered a 6% month-on-month increase in new financial services job opportunities in June 11. An increase of this nature is promising news to the markets, showing that there is still appetite to hire into financial institutions. From a job seeker perspective, the volume of new professionals entering the financial services jobs market increased by 3% from May 11 to June 11. Although this is considerably less than the increase witnessed during the same period last year, there is still evidence that employees are on the look out for new career opportunities.

The London financial services sector continues to show its agility and robust nature compared to its European neighbours. Despite the ongoing crises of the Eurozone, combined with the recent Japanese and Middle East crises, the FTSE, which is considered a measure of business prosperity, continues to work against all odds and hover around the 6000 market. Add to that, a fall in unemployment in the UK over the last three months, and a general rise in job volumes in the private sector, can only continue to prove that London is the only team everyone wants to play for.

exodus from London, Financial Services, London, London Employment monitor

This week, we released a salary survey which provides market intelligence into hiring and remuneration across the financial services sector in London. Over the course of 2010, we saw increased hiring activity within this sector. According to Morgan McKinley’s widely read monthly London Employment Monitor, the total number of job vacancies increased by 48% year-on-year. Whilst this is a pleasing increase, it is still at relatively suppressed levels when compared to pre-recession levels.

Other key findings from our research are also positive. Well over half of hiring managers (62%) expect to see salaries increase over 2011. Only a quarter (26%) expect them to stay the same. This not only reflects an improving market and a stronger demand for talent by our clients but is a strong indication of how, once again, it is becoming increasingly difficult to attract and retain staff. Over half (52%) of our clients cited that attracting and retaining staff would be the key driver for salary increases this year. Combined with these results, the whole subject of bonus is clearly a key barometer of market conditions. Whilst the largest percentage of our clients (38%) felt that bonuses would remain similar to 2009/10, over a quarter (27%) felt they would increase in the 2010/11 bonus round. Overall, the trends and key indicators for 2011 continue to point to further improvement in the employment market.

Download our 2011 London Salary Survey as a pdf [2.92 MB] >>

We hope you find this salary guide informative. If you have any questions, feedback or would like to discuss any of the findings in this salary survey, please feel free to contact me or any of my colleagues here at Morgan McKinley for further information. Finally, I would like to thank you for your continued support and wish you all the best in your employment endeavours in 2011.

2011 salary survey, Careers, Financial Services, financial services salary survey, London, London salary survey, Morgan McKinley, recruitment