Sunday 20 January 2013 11:39 pm

Jobs bloodbath as red tape hits banks’ growth

THE FINANCIAL services industry shed 25,000 jobs in the final three months of 2012 and will lose another 18,000 in the first quarter of this year, the Confederation of British Industry and PwC warn today, as regulation weighs firms down and weak markets keep their costs under pressure. The only real growth area in bank employment is in compliance, as more staff are hired to deal with the flood of incoming regulation. But a lack of suitable candidates means that banks cannot expand any profitable business lines because of a shortage of staff who can deal with the red tape, PwC warned. “Good compliance officers are like gold dust and the good ones can attract very high levels of compensation,” said PwC’s Kevin Burrows. “But the question is how to feed that demand for talent – banks need people with a very specific skill set and they just don’t exist.” The study found a net balance of 51 per cent of firms said regulation was limiting the amount of business they can do this year, while a balance of 48 per cent said a lack of professionals is a hindrance – making those problems bigger than even a lack of funding. PwC also said the banking industry has plunged in popularity among potential employees, leaving it struggling to attract new staff and potentially creating a damaging skills shortage in the years to come. Meanwhile recruiter Morgan McKinley today revealed a 36 per cent drop in City job vacancies in December. Just 1,323 jobs were advertised in the month, down from 2,079 in November and from 1,733 in December 2011. And recruitment firm Astbury Marsden’s latest figures showed 22 per cent of City workers expect to receive no bonus this year, double the 11 per cent recorded last year. The agency’s study also found 44 per cent believe government pressure is holding down their pay. “The FSA has warned the chairs of bank remuneration committees that they expect 2013 pay levels to be below those of previous years,” noted Astbury Marden’s Mark Cameron.