The financial services job market in the City of London faced its most rapid decline since the 2008 financial crisis, as revealed by a recent survey conducted by leading recruitment firm Morgan McKinley.
In the fourth quarter of the previous year, the City witnessed a staggering 42 per cent drop in available positions within the financial services sector compared to the same period in the preceding year.
This substantial decrease was accompanied by a 15 percent reduction in the number of job seekers during the same timeframe.
The global financial landscape saw over 60,000 job cuts from major banks in 2023, marking the most aggressive wave of layoffs since the 2008 financial crisis.
The surge in job cuts was attributed to a frenzied over-hiring response following the pandemic, leading to a significant downturn in hiring activities within the financial sector.
Transformation of the job market
Hakan Enver, the Managing Director at Morgan McKinley UK, noted the swift transformation of the job market from its competitive state in 2022 to a notable slowdown in 2023. Enver attributed this slowdown to a combination of factors, including elevated interest rates, inflationary pressures, and escalating geopolitical conflicts.
The repercussions of this downturn have been particularly felt by recruitment firms specializing in talent acquisition for City banks, insurance companies, and brokerages operating within the financial services sector.
Tech skills are crucial
Sheila Flavell CBE, Chief Operating Officer of FDM Group, expressed her insights on the situation, emphasising the critical role of tech skills in the current job market. Flavell stated, “Tech skills are a necessity across all industries, especially within the financial sector. The scarcity of skilled tech professionals hinders the adoption of new technologies, limiting the growth of many City finance firms.”
She further emphasised the need for concerted efforts to help individuals acquire new skills and stay ahead of the market slowdown in the financial services sector. Flavell suggested, “Providing greater training and upskilling opportunities, such as career transitions or graduate programs, can help a wider pool of people improve their skills and fill gaps within the industry.”
As the City grapples with the impact of these challenges, industry leaders and policymakers are urged to collaborate in implementing effective strategies to revive the financial services job market and ensure its resilience in the face of ongoing economic uncertainties.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
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