City brain drain ‘may hurt growth prospects’

The City of London is facing a brain drain of talent that could eventually hit the UK’s economic growth, experts have warned.

A deficit of workers threatens because of skills shortages, an ageing workforce and a restrictive migration policy, the Association of Professional Staffing Companies (APSCo) said.

Almost 1.3m Britons with university-level education are now living abroad, it adds. By 2050, the UK is expected to have a shortfall of 10,200 qualified accountants, for example.

Ann Swain, chief executive of the recruitment trade body, said: “The recent positive economic data, coupled with a marked fall in unemployment is adding fuel to the growing skills shortages employers are experiencing.

“The skills shortages have always been there but as the recovery gains pace and employers have more confidence to hire, we could be facing a real problem.”

The warning was made as figures showed that the number of jobs in the financial services industry fell by 3.5 per cent between July and August, from 7,056 vacancies to 6,804, according to Morgan McKinley.

The number of professionals looking for positions also fell. Some 5,816 people were on the hunt for City jobs in the month, 25 per cent lower than in July. However, this was largely due to the summer holiday season.

Hakan Enver, operations director at Morgan McKinley, said: “As we anticipated last month, the slight fall in August is not unexpected, given the holiday season, and we are experiencing all the signs of a bounceback in activity in September.

“All the macroeconomic signs are pointing to this. The OECD has raised its UK growth forecast and last week’s Purchasing Managers’ Index revealed that the UK’s services industry grew at the fastest rate since 2006. There was also good news from the manufacturing and construction sectors and I am cautiously optimistic that this increased confidence will feed through into hiring figures during the final quarter of the year.”

For those people who actually secured news jobs during the period, the average salary actually rose by 20 per cent compared to a 17 per cent rise the previous month.