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Mark shares his views on how the City jobs market is changing.

Believe it or not, it’s almost 5 years since the rumours of a collapse in global financial markets first arose.  Depending on what side of bed I get up on I fluctuate between thinking “wow! How time has flown” and “damn! It’s felt more like 15 years”.  Regardless, for many staff working in financial services and insurance, the last few years have generally held fairly bleak memories. I don’t think anyone would deny that the City has changed dramatically since the heady pre-GFC days.  

Bankers, in particular, have been painted as a popular public villain; the kind of characters that a parent might use to frighten small children.  “Don’t misbehave Little Johnnie, or a banker will steal your money box to beef up his bonus!”   And while banks and bankers may have played their part, I’m sure that in the fullness of time history will identify there was a breadth of causes for the ‘credit bubble’.

Nevertheless, life hasn’t been easy for those still working in the City, whether you’re a banker or not.  As someone running a business which aligns itself closely to the fortunes of banks, investment managers and insurers I’ve watched closely how the market for talent has changed during this time.  Recently I found myself reflecting on just how much employment opportunities in the City had changed in the last few years. I was quite surprised by the starkness of the findings.  

• When the Global Financial Crisis first hit, much of the initial impact on jobs was cushioned by highly flexible workforces engaged on equally flexible compensation structures weighted towards bonuses (I won’t debate the merits of bonuses here). The impact of these arrangements meant that the number of job losses in 2008/9 was lower than one might have expected given the scale of the crisis.  In many respects, the market is perhaps now arriving at more realistic employment levels. Although the potential size and scope of the City continues to be heavily impacted by the events still unfolding across the Eurozone.
• It will come as little surprise to many to learn that there are now 28% fewer people working in London and Canary Wharf than there was in 2007.  The CEBR’s latest estimates suggests that there will be 255,000 people employed in the sector at the end 2012 down from 354,000 in 2007.
• In 2007 roles were plenty, candidates were few: for every 10 roles that came to the market, there were only 8 available candidates.  In Q1 2012, for every 10 roles that came to market there were 23 candidates to choose between. It’s a buyers market.
• Despite this, a job in the City still pays fairly well when compared to many other sectors.  However despite the widely held view that everyone in the City is earning millions, the median salary in the sector was just under £42,000 in 2011.  The average salary is approximately £74,000 suggesting that there are still a few folks taking home some hefty pay packets.
• According to the CEBR the bonus pool for 2012 is likely to be about one fifth of the 2007 pot.  The proportion of this paid in taxes has risen from 54% to 59% over the same period.  
• The City remains a major contributor to tax – estimates by PwC suggest that something of the order of £63 billion was paid over to HMRC by the Financial Service industry in 2011.  This is up from £53 billion in 2010 and represents more than 12% of total government receipts from all taxes.  It’s in everyone’s interests to see the City flourishing again soon.

But it’s not all doom and gloom.  London is still the number one global financial centre and is proving to be somewhat of a safe haven for capital in uncertain times.  This strong position combined with a history of product innovation, a growing yuan market and some of the best and brightest brains in the world means the City still has some life in it yet.

For more market insights, you can follow Mark Cameron on Twitter @markccameron.