Virus hits financial jobs market hard

The devastating impact of the Covid-19 pandemic on employment prospects in London's financial services is reflected in a report published on Tuesday.

David Sapsted

21 April 2020

Morgan McKinley’s latest 'London Employment Monitor', which details City hiring trends from January through to the end of March, said the year started full of optimism after the government’s decisive action to end the long-running Brexit saga.There was a 97% month-on-month increase in jobs available in January, with the upbeat trend continuing through February. And then along came coronavirus and, in March, the jobs market plunged 38%.

From Brexit to Coronavirus

“Out of the frying pan and into the fire," observed Hakan Enver, managing director of Morgan McKinley UK. "We barely got to take a breath between Brexit and this new global crisis.“London came back in the new year with a renewed optimism, which was reflective in the general mood of employees and employers alike. Soon enough, business confidence fell once again which has in turn impacted trading prospects and overall economic optimism."Thankfully, City employers are doing all they can to enable remote working to ensure the safety of employees as well as business continuity.”Mr Enver pointed out that numerous banks had pledged not to cut jobs in 2020 and were honouring job offers already made. "This is a strong sign from major institutions that, by working collectively, they can do their part to fend off similar dire circumstances that the UK faced after its decision to exit the EU," he said."However, projects are being paused which is inevitably slowing hiring. Once the initial shock wears off we will see jobs begin to trickle back through.

Fintech and IT will continue to have a robust job market

“Institutions continue to recruit business critical vacancies, whilst at the same time, ramping up their remote team systems and practice.“This means that those working in IT and fintech are going to continue to enjoy a robust job market. Software engineers, IT auditors, cyber security experts and data and analytics professionals will continue to be in demand.“All onboarding is completed remotely, with the new employees starting work from home, with the necessary equipment being couriered to them. Positions outside of these verticals continue to progress, but at a slower pace. In some instances, the final interview being put on hold until staff are able to return to the office and a final face-to-face meeting then be conducted.“Despite all the above, if the global pandemic results in a global recession, then we will feel the consequences of this moment for some time. That’s why right now it’s all hands on deck to avoid a health calamity that precipitates an economic one.”

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Office for National Statistics (ONS) employment data

The report coincided with the publication of the latest UK employment data from the ONS which showed that, before the pandemic lockdown, the number in work in the UK stood at a record high in the three months to the end of February.The ONS said that 76.6% of people aged 16 to 64 were in paid work, representing some 33.07 million people, 352,000 more than a year earlier.Minister for Employment Mims Davies commented, “In the midst of the worst public health emergency in our lifetimes, today’s employment figures have already been overtaken by current events - and we’re doing all we can to help families make ends meet.“But the statistics – including a 4% unemployment rate – do serve as an important reminder of the strong foundations we have built as we look to withstand impact on the global economy.”

KPMG: unemployment could rise to just under 9% during the Coronavirus lockdown

Yael Selfin, chief economist at KPMG, said the latest figures masked the extent of the rise in unemployment expected this year."We estimate that as many as 13 million jobs are in sectors highly affected by the lockdown, representing 36% of all jobs in the UK, which could see unemployment rising to just under 9% during the lockdown period," she said."An additional spike in unemployment after the lockdown also seems likely, once government support via the Job Retention Scheme ends."