Pay packets in the City are bulging as competition for talent heats up amid the post-pandemic rebound.
Finance firms are hiking pay in a bid to lure workers away from their current employer, research by professional services recruiter Morgan McKinley found.
Workers moving from one company to another netted on average a 22 per cent uplift to their pay packet in the last quarter, the highest increase in three years.
In July 2021 alone, pay increases swelled 27 per cent, the highest monthly jump since Morgan McKinley started tracking the data.
The resurgence in activity in the finance sector, triggered by the post-Covid-19 bounce, has prompted firms to expand staffing levels to capitalise on a booming trading environment.
Firms have been buoyed to push ahead with business plans as the spectre of the pandemic has receded, increasing demand for City workers. According to insurer Willis Towers Watson, global deal making activity could reach a record high this year.
Hakan Enver, managing director at Morgan McKinley UK, said:“The Square Mile is back in business – socialising, commuting and face-to-face meetings are back on the cards as Londoners return to the office.”
“There is no doubt the post-Covid-19 recovery has created competition for talent and therefore, resulted in salaries increasing.”
The City has been shielded from the labour shortages restricting the wider economy. According to Morgan McKinley, there are around two potential applicants for every available job.
The number of new roles created in the finance sector reached its highest level since the beginning of 2019 and are up 29 per cent over the last quarter, reaching 10,059.
Despite labour supply remaining robust, there are areas where firms are struggling to find suitable candidates due to a shortage of skills.
“Candidates can be difficult to find in certain areas with an increasing skills shortage especially in cybersecurity, software development and data which has seen huge demand over the last 18 months,” Enver added.
There were 47 per cent more available candidates in the finance sector last quarter.