Skilled candidate drought

London will officially enter a candidate-short market in Quarter 3 2010, according to research by Ambition, a global financial and professional services recruitment firm.

There are currently 9 vacancies for every 10 skilled candidates actively looking in London. This has risen from 3 vacancies per 10 candidates at the bottom of the economic downturn in Quarter 1 2009. London can expect to have 10.3 vacancies for every 10 active candidates in Quarter 3 and 12 vacancies per 10 candidates by Quarter 4.

Tim Gilbert, UK managing director of Ambition, said, “Businesses now demand more full and varied skill sets from candidates in order to maximise their value to the business. Any candidate that fits the bill is being snapped up and well rewarded in order to retain them. This has left a very shallow talent pool.”

“We’re not expecting a fall in the number of jobs available in London. But even if job growth does slow slightly there won’t be huge numbers of experienced candidates suddenly appearing on the market. This will leave businesses in a number of sectors fighting over talent. As a result you can expect wage inflation – particularly base salary inflation – and more valuable counteroffers being handed out.”

The dearth of supply and increased demand within the financial services industry has pushed salary levels of skilled temporary candidates. Experienced product controllers who were receiving £300 - £350 (US$470 - US$545) per day in January can now expect to command £350 to £450 per day, a median increase of 23%.

On the permanent side, skilled financial services candidates are being awarded generous counter-offers in order to remain in their roles. Increases of £10,000 - £15,000 on top of base salaries of around £55,000 are not uncommon.

Gilbert continued, “Financial services firms are leading the charge in London and this sector will be the first to officially enter a candidate short market. But legal and professional services firms aren’t far behind.”

“The government has stated it expects jobs growth in the private sector over the next five years as a result of the austerity measures. In London there are early signals that this trend is underway and the private sector candidate pool cannot support the demand.”