Morgan McKinley data released yesterday indicate that job vacancies in the financial services sector have decreased by 17 percent compared to the same quarter last year. The cause appears to be inflation, war-related disruptions, and post-Brexit changes.

Morgan McKinley’s associate director, Mark Astbury, said, “This will likely remain subdued in the coming months due to political events, including the Labour government’s first budget on October 30 and the U.S. presidential election on November 5. Firms are now cutting back on aggressive hiring and focusing on strategic hires driven by economic uncertainty and inflationary pressures. “

Overall, positions fell, but job openings increased by 7% from the previous quarter; growth demand was for expertise in regulatory compliance, digital transformation, and environmental, social, and governance initiatives.

According to a recent statement by the Lord Mayor of the City of London, London’s financial sector has reportedly lost nearly 40,000 jobs due to Britain’s exit from the European Union. This is far more than past estimates and speaks volumes about long-term losses following Brexit in the financial services sector.

As companies continue to adapt to these forces, the emphasis is on recruiting talent in vital competency areas, such as compliance and sustainability, that the companies need to navigate today’s economy and regulatory environment. Though rising inflation and political uncertainty keep the job market cautious in the short term, experts predict a different outlook for the coming months.

As if this was not enough, against this backdrop, the City is seen to be in the throes of post-Brexit change, with firms either relocating some of their operations or opening up satellite units within the European Union. The very nature of the exodus has created long-term dilemmas for the City, the erstwhile epicenter of world finance, as indicated by the 40,000 job losses reported by the Lord Mayor. The issues further go into the very depths of the sector than anything one would have expected. Apart from changes in regulations due to Brexit, the financial institutions have also experienced changes in their recruitment approach to adjust to the new economic environment.

In addition to what has been referred to as the trends in Brexit, the overall aspects globally, including inflation and geopolitical instability-that in some way connects with war-related disruptions- make firms anxious when it comes to offering jobs to workers. More and more are focusing on core roles in compliance, digital transformation, and ESG projects, which have taken on ever-increasing importance to enhance competitiveness and accommodate regulatory pressure. Indeed, as firms focus on their strategic hiring priorities in these areas, more general expansion plans and aggressive recruitment are being set aside to better align with a more risk-averse approach to growth in a world of ongoing economic uncertainty.

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