City salaries set to soar again as skills crisis bites

City salaries are set to soar again this year as employers face up to a growing recruitment challenge.

More than half of City firms believe it is harder to find good job candidates now than it was a year ago, according to a poll by financial services firm Morgan McKinley .

This is despite an increase of 32% in the number of people looking for a new role in the City during that time. Seven in 10 employers surveyed said that they expected salaries to increase by up to 10% this year on the back of the skills shortage.

However, this is against a backdrop of average salary rises of between 10% and 15% for key financial roles in 2006. There were increases of 30% and above between 2003 and 2005.

Robert Thesiger, chief operating officer for Europe at Morgan McKinley’s parent company, Imprint, said: “In a skills-short financial services market, salaries for strong performers have inevitably risen over the past year.

“However, the step change in basic salaries that occurred in the City between 2003 and 2005 has not been repeated this year. Banks have taken a more considered approach and are less willing to break with structured salary bandings unless for exceptionally high performers.”

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