Salaries Slump and Hiring Nosedives in UK Finance Services Sector

The finance services sector job market in the UK is in a tailspin and faces negative growth, according to a recent report by the recruitment consultancy Morgan McKinley.

Hiring by banks, asset managers and the insurance sector was down 57 per cent in March 2012 compared to a year ago, reveals a survey by Morgan McKinley.

The Morgan McKinley report is based on a survey conducted on 372 hiring managers and professionals from the financial services in London.

The survey finds a fall of 16.5 per cent in the average salaries of senior employees in the financial sector during the period February to March in 2012, indicating the sharpest drop in a year.

The case is worse for employees at middle management positions such as human resources officers, junior analysts, project managers, financial controllers, portfolio analysts and business analysts.

The average starting salary at a new job fell to £44,605 in 2012 a drop of 12.7 per cent compared with £51,099 in March 2011. There was a 7.6 per cent overall fall in the average salary in the UK finance industry which is a drop of £50,330 from March 2011 to March 2012.

But the hiring trend did pick up by 4 per cent in the first three months of 2012 from the fourth quarter of 2011.

According to the survey, 12 per cent of the job seekers are more confident about job availability in the permanent market compared to the past year. Over 35 per cent of job-seekers are optimistic that salaries will rise over the course of 2012 while 50 per cent expect salaries to stay at their current levels.

"We are beginning to hear some anecdotal indications from City employers that the market is starting to regain some of the confidence that was particularly low at the end of last year," Reuters quoted Andrew Evans at Morgan McKinley as saying.

Market confidence was still lower with a dip of 8 per cent in new hiring in March than February.

"Any positive sentiment tends to be immediately cancelled out by some form of negative market commentary. We are genuinely working in a confused and uncertain market," Evans commented.