There is some not good news this morning. Recruitment firm Morgan McKinley, known for its monthly look-backs at financial services hiring in London, says the number of jobs on offer fell 50% between mid-May and mid-June 2012 compared to the same period in 2011. This was also down 33% on the month previously.
This is bad, but not entirely surprising. Banks are making redundancies and struggling to remedy lacklustre returns on equity. More recently, Barclays
Capital, the City’s hiring engine for much of the past four years, has had issues with its main piston.
The real question is when hiring will recover. Two ominous opinion pieces in the Financial Times this week have suggested it might be a while. Firstly, Wolfgang Münchau suggested the eurozone crisis might go on for 20 years: there is no real support for a banking union and neither Spain nor Italy can sustain eurozone membership at the current rates they’re paying on their 10 year government bonds. Secondly, Jamil Baz, chief investment strategist at GLG, has penned a column today reiterating his view that the crisis has barely started and insisting that it will be another 15 years before the world economy reaches “escape velocity” and begins growing again.
Both are simply opinions and Baz’s prognostications don’t seem to have done much to help GLG’s struggling parent company. Both simple opinions are worth considering if you’re looking for a new financial services job however: the eurozone is contributing to investor wariness and reduced risk-taking; as Goldman Sachs pointed out last year, investment banking revenues are closely correlated to GDP. If Wolfgang and Jamil are right, it may be a long while before banks start hiring again.
What can you do?
What can you do? 20 years is too long to pass off as gardening leave.
1. Projects, change, regulation
Jobs in all these areas remain strong, says Morgan McKinley. Self-reinvention is called for.
2. Singapore, Indonesia, Malaysia
Both Michael Page and Robert Walters have issued trading updates recently. Asian financial services hiring is unquestionably slowing: Robert Walters’ Asian revenues were down 6% year-on-year in the second quarter due to the banking crisis and Singaporean GDP is being affected by the eurozone crisis.
However, Michael Page’s second quarter profit in Asia rose 17% year on year. A new Malaysian office helped.
3. Contract work
In times of uncertainty, employers are more likely to go for people on restricted-term contracts than permanent hires on expensive base salaries. There should be more contract work as a result. See point 1.
4. Internal moves
Consultants working on ‘human capital reorganisation’ programmes in investment banks say there’s a big impetus to move front office staff into new positions internally. These new positions are often in the middle office and will pay less. Now may not be the time to turn your nose up.