UK financial services sector bouncing back
20 January 2014
The UK’s financial services sector is in the vanguard of the economic recovery, with growth in finance sector jobs set to accelerate.
Mon, 20 Jan 2014The UK’s financial services sector is in the vanguard of the economic recovery, with growth in finance sector jobs set to accelerate.
According to the ‘CBI/PwC Financial Services Survey’, employment in the finance sector grew at its fastest pace since 2007 and expected employment growth for the first quarter of 2014 is the strongest since the survey began.
The authors of the survey estimate that financial services jobs increased by 10,000 in the fourth quarter of 2013 and expect a further rise of 15,000 in Q1 2014. That would take employment in the sector to 1.16m in Q1 2014 (52,000 lower than Q4 2008).
Matthew Fell, director for competitive markets at CBI, says: “As the recovery takes root in the wider economy, it is beginning to feed through to financial services firms. Things are starting to look more ‘normal’ after five years of volatility.
“All the key indicators – optimism, business volumes and profitability – are up. But it’s particularly encouraging to see longer-term confidence indicators like marketing spend, employment and investment spend also rising strongly.
“It’s also telling that financial services firms are now less worried by levels of demand and regulation, and are instead concerned about a skills crunch, their systems capacity and stronger competition.”
Adrian Kinnersley, managing director of City of London-based Twenty Recruitment Group, agrees that the market has improved, though he adds: “But then it couldn’t have got any worse.” And despite the improvement, “it not the heady days of the mid-2000’s boom times”, he cautions.
Adam Buck, chief executive officer of professional recruiter Phaidon International, is less equivocal. He tells Recruiter that the UK financial services sector “has bounced back”, with previously delayed hiring picking up after Christmas.
Buck says that risk and regulatory positions have been particularly strong.
Elsewhere, Michael Page’s ‘2014 Employment Trends Survey’ predicts job growth will be strongest in professional services, with around three out of five respondents saying at they will increase headcount. The survey of 4,000 of the firm’s clients finds confidence at its strongest among smaller and medium-sized companies.
“All major sectors which make up UK GDP have responded with encouraging signs of growth, in particular, 52% of companies within the automotive sector [will increase headcount], 50% of construction, 40% of manufacturing, and 40% of banking businesses,” says Oliver Watson, UK MD at Michael Page.
“Within these key sectors SMEs are trumping large companies in relation to hiring optimism for example in professional services 11% of SME respondents said they had intentions to increase hiring versus 7% of large companies. The message was even stronger in the manufacturing sector which revealed that twice as many SMEs are increasing headcount.”
Meanwhile, the winter forecast of economic forecasting group The EY [formerly Ernst & Young] ITEM Club says that unemployment will fall below 7% in the first half of the year, driven by an improving economic outlook and a surge in demand for labour.
The report predicts that older workers delaying retirement, immigrants and the impact of government cuts will add another million to the labour supply over the next two years, continuing the transformation of the labour market.
The report says that in the next two years 400,000 older workers, who would previously have retired, will hold on to their jobs – far outstripping the number of new immigrants or former public sector workers joining the private sector workforce.
Mark Gregory, EY’s chief economist, says that the strong demand for labour will create a competition for talent, while all sectors must face up to a changing workforce.
“The challenges on the labour front will become a real pressure point for business, with a war for talent in high growth areas such as the construction, professional, technical and scientific services. At the same time, a changing demographic and later retirement will represent an unforeseen challenge for managing human capital.”
According to the ‘CBI/PwC Financial Services Survey’, employment in the finance sector grew at its fastest pace since 2007 and expected employment growth for the first quarter of 2014 is the strongest since the survey began.
The authors of the survey estimate that financial services jobs increased by 10,000 in the fourth quarter of 2013 and expect a further rise of 15,000 in Q1 2014. That would take employment in the sector to 1.16m in Q1 2014 (52,000 lower than Q4 2008).
Matthew Fell, director for competitive markets at CBI, says: “As the recovery takes root in the wider economy, it is beginning to feed through to financial services firms. Things are starting to look more ‘normal’ after five years of volatility.
“All the key indicators – optimism, business volumes and profitability – are up. But it’s particularly encouraging to see longer-term confidence indicators like marketing spend, employment and investment spend also rising strongly.
“It’s also telling that financial services firms are now less worried by levels of demand and regulation, and are instead concerned about a skills crunch, their systems capacity and stronger competition.”
Adrian Kinnersley, managing director of City of London-based Twenty Recruitment Group, agrees that the market has improved, though he adds: “But then it couldn’t have got any worse.” And despite the improvement, “it not the heady days of the mid-2000’s boom times”, he cautions.
Adam Buck, chief executive officer of professional recruiter Phaidon International, is less equivocal. He tells Recruiter that the UK financial services sector “has bounced back”, with previously delayed hiring picking up after Christmas.
Buck says that risk and regulatory positions have been particularly strong.
Elsewhere, Michael Page’s ‘2014 Employment Trends Survey’ predicts job growth will be strongest in professional services, with around three out of five respondents saying at they will increase headcount. The survey of 4,000 of the firm’s clients finds confidence at its strongest among smaller and medium-sized companies.
“All major sectors which make up UK GDP have responded with encouraging signs of growth, in particular, 52% of companies within the automotive sector [will increase headcount], 50% of construction, 40% of manufacturing, and 40% of banking businesses,” says Oliver Watson, UK MD at Michael Page.
“Within these key sectors SMEs are trumping large companies in relation to hiring optimism for example in professional services 11% of SME respondents said they had intentions to increase hiring versus 7% of large companies. The message was even stronger in the manufacturing sector which revealed that twice as many SMEs are increasing headcount.”
Meanwhile, the winter forecast of economic forecasting group The EY [formerly Ernst & Young] ITEM Club says that unemployment will fall below 7% in the first half of the year, driven by an improving economic outlook and a surge in demand for labour.
The report predicts that older workers delaying retirement, immigrants and the impact of government cuts will add another million to the labour supply over the next two years, continuing the transformation of the labour market.
The report says that in the next two years 400,000 older workers, who would previously have retired, will hold on to their jobs – far outstripping the number of new immigrants or former public sector workers joining the private sector workforce.
Mark Gregory, EY’s chief economist, says that the strong demand for labour will create a competition for talent, while all sectors must face up to a changing workforce.
“The challenges on the labour front will become a real pressure point for business, with a war for talent in high growth areas such as the construction, professional, technical and scientific services. At the same time, a changing demographic and later retirement will represent an unforeseen challenge for managing human capital.”
