Pay for admins on the downswing

Front and middle office City employees are in luck: jobs are rising, and so is pay. But for administrative staff, pay is falling.

The latest report from recruitment firm Morgan McKinley shows that new financial services vacancies in the City of London were up nearly 50% in February 2005 compared to February 2004. Over the same period, the average City salary rose 7% to 49,805.

Morgan McKinley's analysis corresponds to a recent report by the CEBR, a think tank. It said the number of jobs in the City of London rose to record levels last year, driven by employment growth in equities, bonds, professional services and corporate finance.

Robert Thesiger, chief executive of Morgan McKinley, attributed the increase in jobs to surging profits at investment banks. Year on year, profits at Goldman Sachs rose 64%, in the first quarter of 2006 for example.

While the number of new jobs rose 50% in the past year, Morgan McKinley's analysis suggests the number of candidates fell 17% over the same period. As a result, the market for talent is now tighter than at any time over the past 12 months.

This doesn't seem to be translating to higher pay for everyone. Over the past year, Morgan McKinley says average pay for support and administrative staff in the City has fallen from 29,326 to 28,420.

Other recruiters dispute this suggestion. Oliver Harris, director of the financial services banking division at Robert Walters, says shortages of administrative staff are driving up pay for admin specialists with banking experience: "If you're a PA who's worked in a bank, you can now command a significant premium. Banks are having to compromise and take people from outside the industry," he says.

Andrew Chancellor, head of the financial services division at Robert Walters, says it is not so much salaries, as bonuses that are rising in the City: "Salaries have risen around 5% over the year, but bonuses are the key source of pay growth."