Article 50 is triggered, City shrugs, says Morgan McKinley
In an historic move, March saw Britain invoke Article 50, launching the two year process of leaving the European Union. Significant as the action is, it had no negative effect on March hiring numbers, as evidenced by the 17% month-on-month and 13% year-on-year increase in jobs available.
“Businesses are done trying to read the tea leaves to see what lies ahead, and they’re getting back to the business of hiring talent,” said Hakan Enver, Operations Director, Morgan McKinley Financial Services.
Bucking post-Brexit expectations, the City of London is thriving. March saw the FTSE 100 close at a record high of 7,415.57, and a barrage of mergers and acquisitions deals are expected to deliver an industry windfall.
“M&A is the heartbeat by which we measure how investments are operating, and all signs point to a healthy City,” said Enver.
“This time a year ago we were looking at significant drops in the number of jobs available. There’s a growing sense that we have a real opportunity to reshape how business is done, for the better,” said Enver.
The jobs spurt is being fueled by hiring in regulatory finance, risk management, and fintech.
“Fintech jobs are opening up across the board, from ambitious new startups to major institutions,” said Enver.
The 9% month-on-month decrease in job seekers is moderate, especially when compared to March of 2016 when seekers were down by 25%. “March is always a quiet month for job seekers. With the first quarter bonus season wrapped up, we expect to see a spike in April figures,” said Enver.
Institutions look to EU expansion, not relocation
Among industry experts, headlines announcing new offices for major financial services institutions are stirring less anxiety than before, as it’s becoming increasingly apparent that many are looking to move only specific units, or to expand their reach into other cities.
“A new office in Brussels has yet to result in jobs lost in London,” said Enver.
As London continues to attract investors from across the globe, institutions are grappling with the need to maintain access to the common European market, as well as the wealth of investors and economic productivity in and around London. Instead of relocating to Europe, therefore, financial services are increasingly looking for the best of both worlds by keeping their foothold in London, and expanding operations in or to other European financial hubs.
With elections set in key European countries in 2017, employers and employees alike understand that things are likely to stay rocky for the foreseeable future, and are focused on playing to current strengths instead of unknown future woes.
“Now that everyone’s caught the populism bug, it’s impossible to avoid it. Adapting to it is proving more effective than waiting for it to disappear,” said Enver.
With Europe’s lacklustre economic performance as compared to Asia and the United States, upcoming renegotiations of trade deals is seen as a potential boon for the economy. Analysts are focusing on the redrafting of terms with India, China and America in particular.
“Some are looking at business as usual and thinking perhaps an updated model and economic pivot will serve them better,” said Enver. “Europe is a vital and precious friend, but it is only one part of the larger global economy in which the financial services industry operates.”
London beats Silicon Valley at its own game
London topped Silicon Valley and New York to take the spot as the world’s number one fintech hub. A new report commissioned by Deloitte concluded that London has “the ‘Fin’ of New York, the ‘Tech’ of the US West Coast and the policymakers of Washington, all within a 15 minute journey. These factors make London one of the greatest connected global cities in the world with the key ingredients for digital success: capital, talent, regulatory and government support and demographic diversity.”
Fintech has been largely unfazed by the Brexit fallout. In part, this is due to its limited reliance on passporting to do business, and also because investors are accustomed to navigating diverse regulatory environments and investing in places as diverse as London, Singapore and California.
“The consensus is that Brexit was a blip on 2016 investment with most [venture capitalists] stating they invest in talent, which creates great companies” said CEO of Innovate Finance, Lawrence Wintermeyer.
Where the industry sees clouds forming on the horizon, therefore, is with respect to the freedom of movement. With Article 50 triggered, many fear that their right to work in London will run out in March of 2019. Though the government has indicated willingness to permit EU citizens to enjoy freedom of movement even beyond Britain’s formal departure from the union, a new poll shows that the government is under immense pressure to maintain a hardline against non-nationals in the British workforce.
“Investors are paying very close attention to freedom of movement. The financial services industry follows the money, and the money follows the talent. As of now, the talent is in London, and the government would do well to help keep it that way,” concluded Enver.