Talent shortage in the City of London boosts salaries

New figures from Morgan McKinley show that salaries are rising in the City due to a talent shortage.

Several new studies have recently shown that hiring is picking up across the UK, and the finance sector is performing particularly strongly. But now, a new study from recruiter Morgan McKinley has found that the employment market is becoming even more favourable for finance professionals.

In its latest London Employment Monitor the company found that the number of financial services jobs in London rose by a substantial 15 per cent in May compared to the same month last year.

Some 7,410 vacancies were recorded in May 2014, up from 6,426 in the same month one year previously.

But the vacancies were 17 per cent lower than the 8,955 opportunities recorded in April. According to Morgan McKinley, that’s simply the result of two bank holidays getting in the way and many workers taking time off to fit in with school holidays.

However, many companies are struggling to find the people that they need. The number of professionals actively seeking new roles fell by 11 per cent from the same month in 2013, creating a shortage of talent that has led many employers having to reassess what they can offer to attract and retain the best professionals.

That explains why salaries are on the rise, with the average pay increase for those who found new jobs last month standing at 15 per cent. At a time when wage rises have only just begun to match inflation in the past few months, that’s a sizeable achievement.

Hakan Enver, operations director at Morgan McKinley Financial Services, says that the salary increases have been augmented by a desire to find talent to cope with changing regulatory frameworks.

In particular, he says that many businesses are now competing with each other to attract talent with highly specialised skillsets.

“We are seeing multiple offers for candidates, and then a bidding war to get that employee’s commitment,” he adds. “As well as this, organisations are trying to throw everything at candidates to stay. After all it is more convenient to up someone’s base pay, but often it is too little too late by this stage.”