15 Sep 2020
Covid-19 and Brexit See Finance Vacancies Fall
Gavin Beale – Finance & Accountancy Recruitment Director at TwentyFour Recruitment Group
The Morgan McKinley Spring London Employment Monitor revealed that the double trouble of COVID and Brexit has meant that the financial services sector saw the lowest level of new jobs in that space for over three years.
Quarter two of this year saw a 66% decrease in new positions in the City, 7,400 down to fewer than 2,500, a significant fall compared to the same period last year.
That being said, there is light at the end of a seemingly dark tunnel as we’re seeing signs of recovery. It’s said that the financial sector is one of the most resilient, and June saw a 72% rise in available jobs! “Typically accounting for around 7% of the UK’s total GDP, research indicates that the historically conservative financial services industry has been a leader in the move to digital”, which as we know, has been a must for businesses wanting to dig their heels in throughout the pandemic.
Morgan McKinley UK managing director Hakan Enver said:
“Covid-19 will no doubt affect the movement towards a digital landscape. However, the ability to pivot and adapt to major infrastructure change stands as a hopeful mark of survivor potential.”
“If any industry will make it through the devastation of the pandemic, finance may well be it. Recruits will need both institutional knowledge and strong technical skills. Companies with an eye on strategic goals in these areas may want to take advantage of a buyer’s market.”
Interest rates were kept at a low of 0.1% by The Bank of England’s Monetary Policy Committee, and inflation was under 2%, a target set by the bank, as well as tax relief, salary support and loans being part of a “rescue package” for businesses. By June, the double impact of fallout from Brexit issues and the Covid-19 pandemic prompted an increase in quantitative easing, bringing the total to £745 billion
Enver commented: “These figures shed light on the magnitude of what the government has had to do to protect financial services alongside the UK economy and what needs to be done to allow a quick recovery. Finance minister Rishi Sunak laid out provisions for another £30 billion coronavirus stimulus package targeting Britain’s growing jobs crisis. On the other hand, the UK government’s furlough scheme, which affects approximately nine million workers, will begin paring back in the Autumn if no further government support is allotted. Despite the easing, stimulus and other efforts as lockdown restrictions are relaxed, consumer demand remains down.”
Many businesses executed immediate, literally overnight cost reduction exercises as a result of the impact on sales and productivity caused by COVID, including, for those that remained in a recruitment stage, prospective new employees being offered lower, sub-market salaries.
Throughout April, the mean salary change was around 6%, which was the lowest recorded according to the report from Morgan McKinley. In May, this rose back up to 22%, some weeks after lockdown, once business activity was able to settle and resume accordingly.