Opinion

Why jobs are still being created, while the economy shrinks

2 min read

23 January 2013

A perspective from the frontline of the financial recruitment sector.

Recruitment, they say, is a barometer for economic prosperity: when the market gains the confidence to hire, green shoots start to appear; a slowdown in vacancy posting is normally a precursor of trouble. If my financial technology recruitment company, Harrington Starr, is anything to go by, things are looking up.

Last year, 2012, was a breakthrough year in financial and commodities technology. Economically, the world has been gripped by uncertainty, and we have seen macro-economic issues rip through established powers. The financial sector has borne the brunt of these issues. However, we’re now seeing significant increases in job levels throughout financial and commodities technology from 2011.

An oddity of this downturn has been ever-increasing employment rates: despite talk of a triple-dip recession, we’ve seen record employment levels across the country, falling unemployment and an improvement in youth jobless figures.

This counter-intuitive trend is particularly evident in the “Fin Tech” space. Job requirements are outstripping demand in niche tech areas. Micro-sectors such as derivatives and fixed income have been crying out for professional services teams to link business and technology.

The financial services and commodities sectors are predicted to grow in Q1 & Q2 of 2013; 84 per cent of companies in a recent survey are launching significant projects this year. Budgets and tech investments look set for sign off. October to December 2012 were three of our best months. Low latency trading, for example, is booming right now with organisations rushing to maximise their systems. Commodities are looking good for 2013 as well.

As a nation, we remain deep in economic uncertainty, but we are a highly competitive country. We expect to see significant confidence returning throughout the latter part of the year.

While the investment banking sector has been hit hard, a raft of proprietary trading businesses are appearing. Technology really is beginning to reduce cost and increase efficiency in financial services. Nimble, innovative, smaller players are picking up business. Our business has hit a £2m turnover rapidly and we’re forecasting to double that in 2013. The Davids really are beginning to beat the Goliaths.

Toby Babb, managing director of technology recruitment specialist, Harrington Starr.