Sector focus: Finance

Finance sector focus

Every month we’ll be taking an in-depth look at a particular sector and letting you know how it’s doing. From employment figures and salaries to the latest trends and stories that rocked that industry.

This month we’re giving you a snapshot on the financial industry, which unlike some of the more stable sectors we’ve previously focused on, has seen its fair share of ups and downs in recent months, and we’re not just talking about the bad press coverage.

 

The financial jobs market

Although the financial industry is still attracting a good number of jobseekers, there’s been a steady decrease in the number of applications over the past year. There was a 6% drop in the number of applications in the past year alone between Q2 of 2012 and Q2 of 2013. And this isn’t a one-off figure either, as larger, more significant drops can also be seen between Q1 2012 and Q1 2013 (16% decrease) and more recently between Q1 2013 and Q2 2013 (14% decrease).

These dips in jobseeker applications can be explained by the fact there are fewer financial jobs being advertised. According to the latest barometer figures, there’s been an 8% decrease in the number of jobs being advertised over the past year. Again this isn’t a one-off figure, as there was a bigger 16% decrease between Q1 in 2012 and Q1 in 2013.

However, recent figures have suggested that the financial jobs market is starting to improve, and between Q1 and Q2 in 2013 there’s finally been a 3% increase in the number of jobs posted.

Despite less jobs being advertised and less applications being received, the competition for individual jobs has still risen by almost 3%.

When it comes to popular locations for finance jobs, since the start of 2013 London advertised the most jobs and received the most applications. For the second year running, Northern Ireland had the least number of jobs advertised and the least number of applicants (126 jobs and 2245 applications in Q1 of 2013, 85 jobs and 765 applications in Q2 of 2013).

 

The good news

Despite the latest barometer figures, there has been some good news in the financial industry, and plenty of banks, insurance companies and other financial institutions are making a profit.

The Lloyds Banking Group in particular has recently seen their shares rise to 77p, the highest in four years. They’ve also seen a pre-tax profit of £2,1bn in the first half of 2013.

As well as banks, the insurance industry is also starting to see more profits. UK insurance companies are the largest in Europe and their investments create 26% of annual GDP, £10.4bn in tax revenue and currently employ around 290,000 people.

Direct Line in particular has recently seen their profits double in the first half of 2013. This is partly due to fewer claims being made due to the weather, and also their controversial decision to cut the number of young drivers they insure, who are often seen to be a bigger risk on the roads. But their profit has certainly come at a price, as part of their recent profits have come from cutting costs and reducing staff numbers, closing three sites and putting almost 2,000 jobs under threat across several of their offices.

And it’s not just UK insurance companies that are in profit. International companies including Prudential and Aviva, as well as Europe’s top insurers Allianz and AXA, are reporting fore-cast beating earnings.

And the good news doesn’t end there, as during a Totaljobs finance-themed Google Hangout, HR Magazine journalist Tom Newcombe said the finance sector in general is recovering at a steady speed. And according to research published by PWC, if the market is well regulated, there could be around 200,000 extra jobs by 2020 contributing to up to a 3% of GDP growth.

 

Tomorrow: Find out what bad press hit the financial sector and what the future holds for the industry.

 

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