May news …Rise in Vacancies…Drop in candidate availability.

Key Points:

  • Continued rise in permanent placements;
  • Growth of demand for staff picks up for the first time in nine months;
  • Steeper decline in candidate availability triggers greater rises in pay.

Permanent placements…

There has been an increase in permanent placements but the rate of expansion in April was the softest witnessed in 2018. The growth of placements was underpinned by a further substantial rise in demand for staff and greater job vacancies.

Decline in candidate availability…

The rate of reduction in candidate availability for permanent roles has quickened to a three-month record. The steepest decline was in the South of England.

Growth of demand for staff…

Vacancies for permanent roles have increased, thereby indicating that there is a greater demand for staff. This demand was higher in the public, as compared to the private, sector.

Pay pressures…

There has been a further rise in starting salaries for candidates placed into permanent roles. This has been linked to candidate shortages and a robust demand for staff. The strongest rise was in the South of England.

 

Commentary 

Demand for staff is still on the rise in every other sector, but candidate availability keeps dropping. Employers are paying more to attract the right people into their vacancies. For individuals, now is a good time to look for a new job, as you are in a strong position to negotiate higher pay. For employers, the challenge is to stay ahead of the competition to maintain and enhance your workforce. This is about more than just pay, it is about providing progression opportunities and a positive workplace culture. As recruitment gets harder the only solution for employers is to get better at attracting and retaining the right skills and staff…

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Inflation Remains at a Record High Amid Candidate Shortages

Key Points from the February Survey:

  • Softer rise in permanent placements
  • High levels of candidate shortages amid high starting salaries
  • Softer rise in staff vacancies

Softer rise in permanent placements…

The number of people placed in permanent jobs increased in February although at a slower rate than January’s recent high. The continued increase has  been attributed to a strong demand for staff and a greater willingness among candidates to take up new roles

Decreased demand for staff…

The demand for staff for permanent positions has risen at its slowest pace in fourteen months.

Availability of staff…

The availability of staff for permanent roles continued to decline in February.

Pay Pressure…

Salaries for permanent starters have increased further in February and the rate of inflation remains at a record high. The higher salaries have been attributed to higher candidate and skill shortages amid rising vacancies.

 

 

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Brexit: A Ticking Time-Bomb for London’s Financial Industry?

Brexit: A Ticking Time-Bomb for London’s Financial Industry?

Fears are escalating as there are concerns that Britain’s vote to leave the EU in 2019 will harm one of its most successful industries…

The Impact of Brexit on the Financial Sector

The industry is crucial to Britain’s economy, accounting for 12% of Britain’s economic output and paying more tax than any other industry. Roughly one-third of the transactions within this sector involve clients in the EU.

There is a division among the population as to the impact Brexit will have on the industry. Politicians and economists warn that London may lose its renowned position as a financial centre. Conversely, those who voted leave support their decision, arguing that Britain will benefit through becoming more self-sufficient.

Indicators

The exact impact of Brexit cannot be predicted. However, below are some indicators to show that leaving the EU will encourage a slowdown in the economy but no drastic decline.

  1. Commercial Property

Highly-respected estate agents record that commercial property prices in London have dropped more since the Brexit vote than during the global financial crisis of 2009.

In terms of figures, the price renting of real estate has dropped by about 5% since last year. However, leasing activity in this area was 17% higher than the long term average in the first three-quarters of 2017.

  1. The Tube

Apart from a few exceptions, in general fewer people are using the tubes. The number of people using Bank and Monument stations is facing its first fall since 2009. A spokesman for Transport for London denies that the closure of some escalators at Bank station in response to the expansion was a significant cause of this change.

In terms of figures, the number of people using the above station declined by 2.7% from 2016-2017.

Although the number of people who using Canary Wharf station has continued to rise, the pace has slackened.

  1. Bars and Restaurants

Currently there appears to be no impact from Brexit of premises applying or renewing their licences to sell alcohol. In fact, the first eight months of 2017 showed these figures to be at a record high.

However, London’s night life no longer focuses on finance workers but attracts a diverse array of individuals. These findings may not be entirely pertinent for this study.

  1. London City Airport

This airport is selected especially by executives for flights to European cities and beyond. Statistics suggest that the number of such people using this airport faces its slowest increase in five years.

In terms of figures, the increase in passengers in the first six months of 2017 was only 0.9% compared to the average annual increase of 10% in the previous four years.

  1. Job Availability

The number of available jobs in London’s Financial Services has fallen the most in the five years.

A survey concluded that 51,922 new financial jobs were created in the first seven months of 2017. This is a 10% decrease in comparison to 2016.

It is estimated that around 10,000 finance jobs will be transferred out of Britain and placed overseas in the near future if Britain is denied access to Europe’s single market. The first type of jobs to be transferred may be at the lower end of firms, meaning that in the short term London may still cling onto its status as a financial centre.

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Job Market Report For Dec 14

Key Points in Summary

  • Growth of permanent placements eases to 18-month lowopen notebook
  • Strong Salary Growth
  • Further marked drop in staff availability
  • Average earnings and Inflation, any improvement?

In the world of staff appointments for November, the rate at which permanent roles are placed, rose at its slowest rate in 18 months. Several sources found they experienced a shortage of skilled candidates and slower client decision-making with this appearing worst in London. Although in the Midlands a stronger growth was experienced.

The demand for staff from employers is rising at its lowest rate in 13 months. The latest official data from the Office for National Statistics shows that vacancies rose by 24.7% on an annual basis in the three months to October. Furthermore, internet-based recruitment spending continued to increase at a strong annual pace. Latest data showed an 8.8% rise in Q2 2014 from the corresponding period one year earlier.

Good news in terms of salaries with the average starting salaries for permanent jobs continuing to rise in November although this is after October’s 8 month low. This has largely been attributed to stronger competition between employers for quality candidates. This increase was sharpest in the Midlands and slowest in London.

Adding on to this, averaging earnings growth has caught up with inflation for the first time in five years. Data from the Office for National Statistics showed that average earnings, excluding bonuses, rose 1.3% on an annual basis in September. Consumer price inflation in September was 1.2%, rising to 1.3% in October. However, earnings including bonuses were up just 1.0%. Pay growth has remained sluggish in spite of the recent recovery in employment. In a recent speech (“Twin Peaks”, 17 October), Bank of England Chief Economist Andrew Haldane drew attention to ongoing structural changes in the labour market which he argues have led to “polarising patterns” at the upper and lower ends, in turn resulting in a marked rise in wage dispersion.

 

On the one hand, high-skilled professions such as IT, engineering and construction continue to see skill shortages, leading to increased rates of pay for new hires, as signalled by the Report on Jobs in recent months. On the other hand, lesser-skilled jobs have seen a rise in the supply of labour which has more than offset rising demand, thus depressing wages.

Haldane identifies three key drivers of this. First, the ‘hollowing out’ of mid-skill jobs, a longer-term trend reinforced by the financial crisis, has led to displaced workers seeking jobs for which they are overqualified. Second, labour force participation has risen significantly, particularly among women and older age cohorts, reflecting changes to the default retirement age and benefits regime, plus concerns over the adequacy of pensions and savings. Third, immigration over the last 20 years has boosted the supply of labour.

As Haldane puts it: “This paints a picture of a widening distribution of fortunes across the labour market – a tale of two workers” … “This has been a jobs-rich, but pay-poor, recovery.”

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