The labour market is slowing down and the number of people in employment fell by 9,000 in November. Wage growth has also slowed down, with a temporary rise at the back end of last year proving to be short-lived.
Part-time and temporary workers are bearing the brunt of the stagnant jobs market, as companies stall on hiring permanent employees. However, overall the jobs market is still proving to be resilient and unemployment is historically low, even though interest rates are low and it’s hard to find a decent ISA or savings account.
The economic and political pressures affecting the UK jobs market are also being played out in the fortunes of leading recruitment companies, especially those that primarily recruit in the banking and financial services sector.
Large recruitment agencies have seen a significant downturn in their fortunes since the EU referendum last year. SThree is one of several leading recruiters who are making a shift into the overseas market. SThree says the UK recruitment market is slowing down as businesses delay hiring decisions amidst the current economic and political uncertainty.
Job Growth in the Financial Sector is Slow
This trend is especially evident in the financial sector. Job growth has been slow in traditional financial services. SThree reports that its revenue from recruitment in the banking sector has dropped by 20% in the last financial year. Many experts believe this is caused by Brexit, with several leading financial institutions considering relocating their headquarters away from London. None of them have made the move as yet, but despite the talk, only the Japanese banks are making any firm plans to move some of their operations.
This uncertainty is affecting the lucrative finance jobs sector, but despite the rumours and the online chatter, most experts believe that a mass departure from Canary Wharf is unlikely to happen. London is one of the biggest financial hubs in the world and banks like to huddle together. From a recruitment perspective, this is a smart choice because they have access to a skilled workforce.
The financial services market is huge, so there is a correspondingly large workforce to recruit from. This creates a more efficient jobs market and recruiters have access to a greater number of talented individuals. London is a great place to work, so it isn’t too difficult to persuade eligible candidates to apply for positions in the financial sector. Cultural benefits swing a lot of clout when recruiting top candidates, and London has a lot more to offer than other cities.
With a slowdown in banking recruitment, some are making the move into financial technology, otherwise known as ‘fintech’. Fintech is a growing market and businesses operating in the finance sector are beginning to recruit in this area.
A Rise in Contract Labour
Recruitment agencies are also seeing a rise in contract business and temporary positions. Because of the economic uncertainty, many businesses are looking for temporary workers rather than permanent staff. This is a growth area, so it is sensible to place greater focus on placing temporary workers until the bigger picture of Brexit becomes clearer.
Despite the allure of London, it is impossible to ignore the slowdown in finance recruitment. It’s a tough jobs market out there, so forward-thinking recruitment agencies have to adapt to the changes.
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