As any armchair economist will tell you, price is a function of supply and demand. When demand exceeds supply, prices will rise. And needless to say demand is more likely to exceed supply when supply is inelastic.
In this sense, the latest salary survey from recruitment firm Morgan McKinley is informative. While Morgan McKinley highlights several areas of British banking in which demand for people is increasing in inverse proportion to the value of the pound, it also highlights an all-important area in which demand is increasing and supply is pretty static.
London-based compliance jobs, change management jobs and technology jobs have all seen “phenomenal growth” in the past twenty four months, says Morgan McKinley. As we’ve noted HSBC and BNP Paribas alone hired 3,500 compliance professionals globally last year, and J.P. Morgan has hired 10,000 technologists globally in two years.
While compliance and technology are clearly hot, however, they’re also areas in which the supply of staff is elastic. Technologists are famously plentiful in Mumbai, Asia and Eastern Europe, and Morgan McKinley notes that rising salaries in the London compliance market are attracting, “high quality candidates from countries such as Hungary and the Czech Republic.”
Not so, projects related to new regulations like MiFID II, ring-fencing of retail and investment banking and the fundamental review of the trading book (FRTB).
Although MiFID II is European in scope and the FRTB is global, projects like ring-fencing are UK-specific. Morgan McKinley says it’s often difficult for banks in London to bring in global talent to meet demand: “Skills are not always transferable because of the need to understand how regulations work within a specific geographical market or regulatory environment.”
The upshot is that rates are increasing. Especially for contract staff who are needed to implement new regulations urgently. In the event that the UK votes to leave the European Union in July, familiarity with local regulations is likely to become even more important. Suggesting that if you’re based in London and want a job that’s insulated from international competition, regulatory change and regulatory projects are the place to be (as long as you’re prepared to perpetually keep up with all the new regulations).
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