In the wake of the Brexit vote this summer, the critical UK finance sector shows two signs of an industry bracing for turbulence: postings for finance jobs are down, but postings for legal professionals are up.
There was a 13.6% drop in job postings for finance jobs in London between April/May and July/August, and a 10% decline in finance postings across England. Over the same period, job postings for legal professionals within the finance industry rose 21%, according to an analysis by Burning Glass’ UK research team and the nonprofit research organization IPPR.
The Brexit referendum, in which British voters supported leaving the European Union, was held June 23. Many critical decisions have yet to be made, and the British government has yet to make an official start to the complex multiyear process of withdrawing from the EU. To gauge the impact of the Brexit vote on the job market, we analyzed UK job postings from the months immediately before and after the vote. We also compared posting totals to the same period in previous years, to eliminate any seasonal variations.
The finance sector seems to be the only part of the UK job market significantly reacting to Brexit, at least so far. Overall, across most sectors, UK job postings were comparable in both distribution and number to those of previous years, suggesting that employers were being cautious and not making any big changes.
Finance job postings, however, decreased as a percentage of the total economy across every region in England in 2016: the first time this has happened in four years. While the financial center of London led the decline, finance postings across England dropped 10%.
|Region||Percentage drop in postings, April/May and July/August 2016|
|East of England||-11.0%|
|Yorkshire and The Humber||-11.2%|
The drop could be seen across a range of roles and salaries:
- Chief Executives and Senior Officials – 26% drop
- Managers and Proprietors in Other Services – 29% drop
- Quality and Regulatory Professionals – 24% drop
- Administrative Occupations: Finance – 29% drop
- Other Administrative Occupations – 32% drop
Meanwhile, postings for legal positions in the finance sector were up 21%. While this isn’t the first time legal postings rose during the summer months – this last happened as recently as 2014 – in those cases, these increases corresponded with increases across the finance sector. Could this surge in demand for lawyers coming alongside a decline in a key British industry be a harbinger of what is to come?
For more on the Brexit analysis, visit the IPPR website.