According to data collected in a survey of annual earnings by the Office of National Statistics, salaries in the fund management sector in the UK has fallen by 20.3% on average in the past year. Profits in the financial sector have been booming in recent years, recovering from their drastic drops during the recession. But costs for personnel have also risen along with climbing profits, from €9 billion to €12 billion. How to experts account for this discrepancy?
There are a few variables to consider when looking at profits and expenditures in this sector. In reviewing the data in the survey, the median salary dip goes much lower than the 20% reported. Those in the industry have made claims of misinterpretation of data presented by the Office of National Statistics. This is further corroborated by the ONS who admit that they worked with a small sample size and the margin of error as it relates to their results is relatively large.
Niel Owen, global practice director for financial services at recruiter Robert Half, said, “We’re seeing a lot of activity in the middle management. There’s a strong demand for good operations people with three to four years experience.” Owen went on to state that accountants are always in demand in the industry. This points to growth, evident by the large number of US managers opening operations int he UK to better access European markets, which explains the increase in hiring. “They will send a senior employee, and will hire four or five people to support him,” said Owen.
Logan Naidu, chief executive of recruitment agency Dartmouth Partners, stated that the years following the financial crisis saw a significant drop in graduating students looking for employment in the financial sector. Employers deal with heavier competition than in times past. “It’s not the prettiest girl in the room any more,” said Naidu, “although that could change when they start paying the big bucks again”.
Monies promised by asset managers may not be such a determinate factor in the decisions of graduate students considering their employment future. In years to come, Naidu explained, many prospective workers may consider to work in smaller and less demanding industries than the financial sector. Though the data presented by the ONS survey is to be taken with the understanding that a larger sample would be needed to get an accurate picture of the industry’s health, it is clear that growth is taking place, but it is almost entirely at the bottom.