The number of new City jobs created dropped 12 percent in July 2013 to 2,172, down from 2,462 the month before, according to Astbury Marsden, a leading financial services recruitment firm. This figure is down 27 percent from July last year, when the number of new City jobs was approximately 2,980.
Astbury Marsden says that positive recent results from some banks, such as Credit Suisse which posted a sharp rise in its profits thanks to good results in advisory and underwriting activity, is fuelling renewed confidence. However, this has not yet translated into an increase in new roles across the industry as regulators’ more stringent requirements on capital are making banks more cautious about expanding headcount. However, although the overall recruitment picture is patchy, some banks are starting to make growth hires for the first time in many months. In particular, many banks are anticipating the continued recovery of the IPO market. Europe’s IPO markets have gained strength in the second quarter of this year, with €5.2bn being raised in Q2, a 58 percent increase on the €3.3bn raised in the first quarter of the year. Several banks are also reporting strong IPO pipelines for the rest of the year.
However, the regulatory pressure on banks to boost their balance sheets means that many banks have put recruitment on hold while they review their operations in order to focus only on the most profitable areas. Mark Cameron, Chief Operating Officer at Astbury Marsden, says: “Hopes for the IPO market are high at the moment as the economic recovery seems to be gaining momentum. In the past this would have resulted in substantial hiring – as renewed appetite for new issues feeds into other activity. However, in the current regulatory environment many banks are still wary about committing to expansion. Astbury Marsden explains that the continually evolving regulatory environment has led to important shifts in banks’ non-client facing hiring strategies. Adds Mark Cameron: “Internal strategy consultants and regulatory experts are still strongly in demand. Banks are listening to the sabre-rattling from the FCA, most recently about an increase in enforcement activity around anti-money laundering requirements and are staffing up accordingly. Meanwhile, there is a new regulation to grapple with including AIFMD and MiFID II. Additionally with the new capital constraints being demanded by the Bank of England and PRA, banks are putting significant resource into planning which areas of their business are going to be most profitable, and where they should best focus resource. One of the early outcomes of these cost-trimming exercises is cutting back on contract hires in specialist technical and professional areas. At the moment there are more permanent roles in areas like technology, or product control positions that require finance qualifications than there are contract roles, and many staff who had enjoyed the freedom and potentially bigger rewards of contract work are now prepared to take permanent jobs.”
New plans announced by government this week to give employers control over apprenticeship training have been warmly received by property maintenance and refurbishment entrepreneur Will Davies – who is a long term campaigner for apprenticeship reform. “At last, we can see a light at the end of the tunnel,” said Mr Davies who is the co-founder of aspect.co.uk. “I have been saying for years that employers know the skills required to make people, especially young people, employable and they should be the guiding force in designing apprenticeships: not civil servants or outside training agencies,” he said.
Government announced a consultation with interested parties last week into a shake up of apprenticeship funding that would give employers access to finance for their own apprenticeship schemes. The consultation follows in the wake of the Richard Review in Apprenticeships published last year which highlighted inefficiency and abuse in the current system. Three possible models for apprenticeship funding are to be discussed. A ‘direct payment model’ would pay employers as soon as they register apprentices. A ‘PAYE payment model’, would pay companies funding an apprentice on receipt of a PAYE return. The final model, known as ‘provider payment’, would retain the current system of funding external training providers but they would only receive funds when employers were happy with training and had made their contribution. “The shake-up of apprenticeship funding is long overdue. The Richard Review concluded last year that the definition of an apprenticeship had been ‘stretched too far’ and that many schemes were allowed to claim government support but only lasted a few weeks and were of little or no value,” said Mr Davies who was a mergers & acquisitions expert at Societe Generale before creating aspect.co.uk
“More than 20 percent of the under 24 year-olds in this country are without employment or training at the moment and becoming more and more alienated by the job market. That is a dire situation: no country can hope to return itself to a sound financial footing if it alienates 20 percent of its future workforce,” said Will Davies. Vince Cable the Business Secretary said, “Employers are the best people to judge what training is worth investing in. These reforms will mean just that. It gives them the power to train their staff to make sure their skills are relevant to the company, while choosing from the wide range of courses available. These measures are all part of the wider reforms the government is making to the apprenticeship system. By putting quality ahead of quantity and giving the training that companies actually want, we are helping to create jobs and support business.” aspect.co.uk has returned to a system of old fashioned apprenticeships for training their own young workers and selects candidates through ‘Apprenticeship Boot Camps’. “Youngsters are put through a series of fitness, literacy and numeracy tests. They are able to commit to the scheme because we were able to demonstrate that the reward was genuine on-the-job training,” said Mr Davies.
