Credit crunch and the jobs market

The impact of the credit crunch on financial services employment in the City of London is anticipated to lead to 40,000 job casualties, according to investment bank JP Morgan.

However, the Midlands economy is still strong and, while it is inevitable that we will see some knock-on effect from these job losses at a regional level, it won’t necessarily be a negative one.

Despite all the doom and gloom in London, we are not yet seeing a real change in the jobs market in the Midlands and the pool of candidates is very promising. The business community always knew that London would be the first and worst hit by the credit crunch in relation to jobs.

What is also interesting is that talented individuals who previously left the Midlands for London now have less of an incentive to relocate or commute down South, as the jobs and career prospects show the first signs of drying up.

As a result, we are noticing a boom in candidates at both part qualified and qualified level, so it seems that the negative picture in London remains confined to the City at present, especially since many of our clients are not listed. That said, it may be a while before the full impact of the credit crunch comes to fruition even in London, as, at present, City companies’ profits are still up.

Even if employers do begin to exercise caution at taking on new staff, the right CV will always open doors. In the past, we have seen the financial recruitment market self perpetuate, regardless of other market forces. What we may experience is a greater reliance on temporary and short-term contract employment, as we saw in the last recession, but we, and our clients, are not concerned.

On the other hand, with mortgage lenders tightening their lending criteria, some candidates who have previously undertaken temporary work, are now finding it difficult and in some cases impossible to secure a mortgage. This means that we may witness a trend in regular candidates moving towards permanent roles in order to gain mortgage approval.

With these conflicting views, it will be interesting to see how the market unfolds, and although it is early days, what can be said is that businesses have a real opportunity to capitalise on the calibre of candidates that may now remain in Birmingham and the surrounding area. Credit tightening will always make a difference to business budgeting and it is vitally important that budget is being allocated to both recruitment and retention. 

However, as businesses tighten their belts it is very likely that the people they employ will become, if not already, recognised as the core asset of that business highlighting the importance for employers to focus on getting the recruitment process right first time around, especially in terms of staffing the finance departments.

The Northern Rock casualty obviously cannot be ignored, but instead of a downturn in recruitment, we are witnessing a surge of candidates coming from the bank.

The introduction of Investbx to the Midlands demonstrates additional confidence in the local market and it is important that businesses continue to identify talent that will help grow their operations and their profits, and that the professional advisers continue to train tomorrow’s business advisors to ensure that the professional community will be able to respond to this appetite.

Although businesses have been demonstrating an element of caution in terms of their recruitment strategy, companies are in fact still recruiting and working closely with their recruitment partners to ensure that they are making a long-term cost effective decision and taking the time to identify the right people to add value to their business operation.