The labour shortages facing the City is not the result of a post-lockdown boom but of a Brexodus of foreign workers, an examination of the current jobs market has concluded.
Specialist recruiter Randstad looked at changes in the ratios of vacancies to applications for jobs in the City – using the volume of applications as a proxy for candidate volumes. In the first half of 2020, Randstad said they had 22 applications for every financial services job advertised. In H1 2021, this ratio fell to 11 applications per job.
But the change has been driven by a collapse in candidate numbers, rather than a huge uptick in Square Mile hiring. Randstad says that the number of applications for City roles were down 34 per cent – but the number of vacancies grew 28 per cent.
Adam Thorpe, director of operations at Randstad UK said, “Across the UK, we don’t think the labour shortages we are seeing are, on the whole, being driven by a dearth of EU labour in the face of Brexit. The shortage of HGV drivers is being felt in Germany, France, and the US, for example – the UK’s shortgages are no different.
“Financial services is different. The sector has experienced an exodus of Belgian business analysts, Czech compliance specialists, and Dutch data modellers. That’s why there’s a recruitment crisis and why candidate shortages are plaguing City firms – it’s not as though the Square Mile is offering ‘poverty wages’ to prospective staff. The UK’s financial services sector has always benefited from immigration, from Nathan Rothschild and Sir Siegmund Warburg, to Michael von Clemm and his vision to create Canary Wharf out of the desolate docklands. But these people are much less interested in coming to work in the UK’s financial services sector. Those that were here and went home – hundreds of thousands of them – are worried about coming over being stranded on the wrong side of a border from their loved ones. The financial services sector as a whole cannot simply go back to how it was before. This is the economic price of leaving the EU.
“The ranks of the unemployed don’t hold the answer; there aren’t hundreds of financial analysts sitting at home waiting for a call – the jobs that were lost in the past year were disproportionately low paid and insecure. And the end of furlough might have unlocked a chunk of the labour supply for the hospitality sector but it isn’t going to conjure people to sift M&A propositions or prepare the legal paperwork for takeover bids. While City employers will train good people in the medium term, that will take years. In the short-term, we are going to have to look abroad to fill the void for now, presumably via the wider Anglosphere, as we did in the nineties and early noughties.”