Tag: Candidate Shortage

Despite global political concerns, financial services are in a significant growth period

Morgan McKinley’s latest recruitment monitor for Q1 2022 shows that recruitment numbers in the financial services industry are rising following pandemic lows and global political and economic concerns. 

According to the report, there were 11 008 jobs available in the first quarter of 2022, over 73% more than the same period in 2021. There was also an increase of 35% quarter-on-quarter from Q4 2021 to Q1 2022.

The continued increase in available jobs clearly shows that business intends to grow, even with global instability.

Another key finding was that 51% more people actively sought new job opportunities in Q1 2022. There was also an average salary change of 22% when changing jobs. This number is significant, indicating a shortage of candidates in the city’s financial services market.

The data shows that businesses are bidding with higher salaries to attract the best talent, as the numbers of job seekers have not proportionally increased in line with the volume of new jobs available. Companies are also taking steps to retain existing staff, often by offering larger bonus payouts.

Hakan Enver, Managing Director at Morgan McKinley, commented:  “Once again, the city’s recruitment has shown stubborn resilience in the face of adversity. The first three months of this year saw companies hiring in their droves and professionals with renewed confidence to move. It’s safe to say that firms have been desperate to hire.”

“This growth is even more momentous when considering the various global issues that have come to the fore. The start of 2022 has been a tale of two opposites for London. On one hand, the Omicron variant, the ongoing invasion of Ukraine and its subsequent energy crisis, 30 year high inflation and rising interest rates have been the talk of the tabloids.”

Despite all the year-on-year increases, the month-on-month growth for 2022 is significantly slower – with a 2% increase comparing March to February and 12% when comparing February against January. The escalating global issues may still impact the London bubble and recruitment numbers for the remainder of the year.

Enver went on to add, “Despite not many knock-on effects being seen in London’s Financial Services hiring thus far, the ongoing invasion of Ukraine and the global economical fallout could yet play a huge role in our market. Further escalations and sanctions would see more companies removing themselves from interactions with Russia, and who knows what might happen here as a result. It will be interesting to see what the figures of jobs and job seekers over the next three months pan out to be.”

 

 

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Starting salaries show a record rise

According to the latest KPMG and REC, UK Report on Jobs survey, candidate shortages have slowed down hiring in both permanent and temporary recruitment. Even though expansions are high based on previous records, the increase rates hit 11- and 12-month lows, respectively.

The report, compiled by S&P Global, is based on responses to questionnaires from around 400 UK recruitment and employee consultancies.

The survey found that overall staff supply had the steepest drop in four months. Those surveyed attributed the candidate shortages to the low unemployment rate and uncertainty related to the pandemic and the war in Ukraine. Other reasons included fewer EU workers and robust demand for staff.

The candidate shortage has led to significant increases in starting salaries – the salaries for new permanent employees rose at the quickest rate in 24 and a half years. In addition, the average wages for temporary workers also increased at the fastest pace in three months.

Although all UK regions showed increases, there were variations in the various English regions. The Midlands showed the steepest increase in permanent placements, while the lowest increase was in the South of England.

Further variations were noted between the private and public sectors, with the largest expansion in demand being in the private sector.

The IT and computing industry continues to show the steepest increase in demand. Conversely, the softest increase was in the retail sector.

Neil Carberry, Chief Executive of the REC, commented: “We can clearly see that labour and skills shortages are driving inflation in these latest figures. Starting salaries for permanent staff are growing at a new record pace, partially due to demand for staff accelerating and partially as firms increase pay for all staff in the face of rising prices. Record COVID infection levels are also pushing up demand for temporary workers, particularly in blue collar and hospitality sectors, underpinning the ability of temps to seek higher rates.

“However, the overall number of placements being made is starting to stabilise. This is no surprise after a period of historically high growth, and in the face of more economic uncertainty. Even so, the jobs market is very tight. Businesses will need to broaden their searches and be creative in making their offer to candidates more attractive, in consultation with recruitment experts. But government can help by incentivising investment in skills and people during the inflation crisis.”

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said: “There’s no end in sight to the deep-seated workforce challenges facing the UK economy. Once again this month, job vacancies are increasing while there are simply not enough candidates in all sectors to fill them. With fewer EU workers, the ongoing effects of the pandemic, the economic impacts of the war in Ukraine and cost of living pressures, many employers will continue to struggle to hire the talent and access the skills they need. With unemployment staying low, there are many great opportunities for job-seekers to join or rejoin the workforce in all sectors.”

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Staff still leave current roles for bigger wages

Employers are facing the worst candidate shortage on record but according to research from international recruitment agency Aspire, two thirds (65%) of people currently working are either searching for or are open to new roles. This will offer hope to hiring businesses.

Employers have, however, been advised to plan for a potential ‘great resignation’, which is likely to see existing workers move jobs if businesses aren’t able to meet the changing needs of staff.

Nearly 600 candidates working across a range of industries from creative to marketing, technology and sales, took part in the study which explored the key issues facing the labour market in the wake of the pandemic.

But this data also serves as an important reminder to businesses about the need to cater for employees’ evolving job requirements, in order to hold onto workers, explained Aspire founder, Paul Farrer: “Given the sheer number of job vacancies right now it’s crucial that employers have a plan in place not only to win this fiercely competitive war for talent but also to retain their current workers. As we have seen with the petrol crisis, an inability to secure talent can result in organisations ceasing to function.”

Paul Farrer made further comment: “Salary is often the first consideration for people when they are prompted, but it’s much more complex than that. The pandemic created a perfect storm. People who may have otherwise moved jobs in 2020 stayed put due to COVID-19 uncertainty. So 2021 sees two years’ worth of employees seeking change. Salary freezes and stalled promotional prospects in 2020 are also playing out. We are witnessing wage inflation across many sectors too, with employers having seen their staff leave for significant rises elsewhere.

“In this environment, smaller, independent organisations have the advantage over larger businesses to a degree. They benefit from agility and are able to move swiftly, make critical hiring and salary decisions there and then. But our research shows that it’s not all about the money. Flexible working policies, a clear and realistic progression path and a genuine commitment to diversity and inclusion have become increasingly important to jobseekers.”

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