In October 2018 jobs decreased by 7% month-on-month, and by 33% year-on-year, however this is the time of the year that firms tend to slow down their hiring until after the new year, meaning that the drop in the number of vacancies could continue.

Although firms have not revealed their post-Brexit staffing plans, Morgan McKinley has highlighted that it is too close to the March deadline for institutions to want to aggressively beef up London staff.

‘Brexit’s grip on jobs feels permanent, but one way or the other, the fever will break in the coming months’, said Hakan Enver, managing director of Morgan McKinley Financial Services. ‘The question now is how deep a hole will we have to climb our way out of come March?’

The reticence of employers to discuss their hiring plans is causing professionals to seek out new opportunities. ‘Businesses are holding their cards close to their chests, prepared to hold off on announcements until the very last minute, and that is worrying their staff’, said Enver. ‘Professionals who want to stay in London, but are concerned about their roles being transferred overseas, are leveraging the shrinking window of time to try and secure a job locally. This is shown in the 26% increase in professionals seeking jobs compared to the prior month.’

Previous research has found that four out of five firms reported Brexit as having already hurt their investment plans, adding that they would implement ‘damaging’ contingency plans if they cannot get more clarity on the terms of the UK's departure from the EU.  

More than 70 business leaders have signed a letter calling for a public vote on the terms of the UK's Brexit deal. However, Brexit is not the only reason for the challenging jobs climate there is also trade wars in multiple regions and an uncertain political climate.

Chancellor of the Exchequer Philip Hammond announced that while the government will introduce new rules tightening the application of IR35 legislation in the private sector, this will be effective in April 2020, rather than April 2019.

‘Whilst the decision to apply these rules in the private sector is not popular with business, the delay at least gives companies breathing space to prepare, though we still do not have the answers to all the fundamental questions of how this will impact both large and medium size companies and the self employed contractors themselves’, said Enver.

Contractors play a key part in satisfying demand for talent from the financial services sector, and the new rules around IR35 are expected to change the contractor hiring market in significant ways. ‘It will complicate things, especially if the categorisation of roles as being on-payroll means legitimate contractors are forced to pay a significantly higher tax rate, or if that forces them out of the talent pool. What we saw in the public sector is that many hirers will make blanket decisions not to use Limited company contractors, even if the roles would pass the test, which severely limits the talent available to them. Part of this is a lack of confidence in the CEST test, and ambiguity over where the liabilities and responsibilities fall, and these are some of the issues that need to be resolved in the next 18 months’ said Enver.

Report by Amy Austin