By Lars Mucklejohn
The number of job openings and jobseekers in the City’s financial services sector has clocked its first annual fall since 2019, according to new data, as firms reverse post-pandemic overhiring and grapple with high costs.
There was a 16 per cent fall in jobseekers and a 38 per cent decrease in jobs available over the course of 2023, according to recruiter Morgan McKinley’s London employment monitor.
The fourth quarter saw a sharp 42 per cent decrease in jobs compared to the same period in 2022 – the biggest drop since the global financial crisis in 2008.
Figures pointed to signs of cooling after a year of strong pay growth and overhiring driven by a tight labour market following the Covid-19 pandemic. Global banks cut more than 60,000 roles in 2023.
“London witnessed an employment shift when it came to financial service jobs in the City from 2022 to 2023,” said Hakan Enver, managing director of Morgan McKinley UK.
“2022 saw a very competitive job market propelled by a robust year of wage expansion; however this changed quickly in 2023 with indications of a market slowdown influenced by the high interest rates, inflation, shortage of workers and uncertainty around the world following the post-pandemic boom and geopolitical conflicts.”
Enver added that the war between Israel and Hamas has also been factor behind financial services companies reining in spending and hiring.
Workers who managed to move from one firm to another received an average pay rise of 16 per cent last year, down from 22 per cent in 2022.
Enver said this softening signalled “less urgency to bring in talent from clients, with business leaders now far more focused on cost reductions and improving cash flow”.
He flagged that as the market starts to improve, which could be as early as the second half of 2024, competition among companies would once again drive up salaries.
