City of London hiring rebounds in 2024 but still well below post-Covid highs

The number of jobs posted by City finance firms rebounded at the start of 2024, according to a new survey, although the market remains subdued following a rough year for recruiters.

Latest figures from recruiter Morgan McKinley showed a 20 per cent rise in the number of job openings in the City’s financial services sector to 5,001 in the first three months of 2024 compared to the to the final quarter of 2023.

Despite bucking three straight quarters of decline, the number was still down 33 per cent compared to the same period last year.

David Leithead, chief operations officer at Morgan McKinley UK, said the first-quarter boost was mainly driven by “normal seasonal factors”, including the release of hiring sign-offs in the new budgetary year and urgency to front-load the year’s hiring to maximise its impact.

“The more telling figures are the steep decline compared to Q1 2023, and this shows that overall the City continues to rein in hiring, to low levels last seen when the pandemic hit, and before that, during the global financial crisis,” he added.

The steep fall in activity comes as many finance firms implement mass layoffs and hiring freezes amid higher interest rates, inflation and geopolitical tension – reversing much of the heavy hiring done immediately after the Covid-19 lockdowns.

Global banks, which are facing cost pressures tied to Basel III capital rules, shed more than 60,000 jobs last year, while the Big Four accounting firms axed nearly 2,000 roles following a slump in dealmaking activity.

The City’s biggest recruiters are feeling the heat. The net fee income of FTSE 100 firm Robert Walters dropped 21 per cent in the first quarter of 2024, while the chief executive of Hays said in February that he was “not satisfied” with the company’s performance.

“It’s not all doom and gloom because the banks will be ready to spring back into hiring mode when the chance arises: it’s in their DNA to seek out and create opportunity,” Leithead said.

“Short-term volatility itself lends chances, and the medium term outlook for M&A and underwriting looks quite positive. So we expect things to improve at some point perhaps in Q3 or Q4.”