Growing demand for bankers, lawyers and accountants.
Goldman Sachs Group employs almost as many people in London today as it did in 2007, before Lehman Brothers filed for the biggest bankruptcy in history, sparking a global recession.
Goldman Sachs isn't alone. Royal Bank of Scotland Group, recipient of the world's biggest bank bailout, has more workers in its securities unit than four years ago. Barclays Capital hired 1800 in 2010.
Investment banks in Europe's financial capital are adding jobs, helping to bolster headcounts at law and accounting firms across London, as the rest of Britain struggles to recover from the worst economic contraction since the 1930s.
"We want London to remain a global financial centre, and one that will continue to flourish and grow because of the employment it brings," Treasury minister Mark Hoban said at a conference in the City of London last week. "We want to see more employment in the UK, not less and I think a blooming financial services sector can help deliver that."
Financial firms generated about 11 per cent of the nation's tax revenue in the year ended March 2010, contributing £53.4 billion ($118 billion) in corporation, sales and employee taxes, according to a report by PricewaterhouseCoopers for the City of London Corporation.
In London's City and Canary Wharf districts, the number of workers will rise to 318,000 this year, from 315,000 last year and 305,000 in 2009, according to the Centre for Economics & Business Research.
Accounting firm KPMG plans to increase its London headcount to 14,000 from 11,000 in the next three years, while PricewaterhouseCoopers raised the number of graduate and internship openings it has this year to a record of more than 1600. Deloitte & Touche plans to add about 1500 employees in Britain this year.
The number of partners hired at London-based law firms rose 28 per cent in the first seven months of 2010 from 2009, according to data from Motive Legal Consulting and LegalMoves.
"A sense of normality is returning to the market," says Mark Cameron, chief operating officer of recruiter Astbury Marsden. Last year, Barclays, HSBC and Standard Chartered said government attempts to force their breakup or raise taxes risked triggering an exodus from London.
But as employment in finance rebounds to within 10 per cent of 2007's peak, the government's emphasis has switched from scrutinising bankers' pay, bonuses and tax contributions to counting on the banks, which required £1 trillion from taxpayers to shore them up, to lead the recovery.
Britain's four biggest banks have said total bonuses for Britain-based employees will be lower than last year and pledged to boost business lending in a bid to end what RBS's Hester has called "banker bashing".
"The fact that they're hiring more people isn't a bad thing," says Astbury Marsden's Cameron.
"There is a more buoyant mood," says Anthony Thomson, chairman of Metro Bank, a consumer bank which opened its first London branches last year. "The siege mentality of the past few years is receding and people are starting to say, 'How can we create more value, how can we create new businesses?"'
London is home to about 240 overseas banks. About 80 per cent of Europe's hedge funds and about 60 per cent of the region's private equity firms are based in Britain. The country also accounts for about 37 per cent of global foreign exchange trading and 46 per cent of all trading of over-the-counter interest rate derivatives, according to lobby group TheCityUK.
As regulators introduce rules aimed at preventing a repeat of Lehman's collapse, banks are hiring people with regulatory and reporting expertise, says Astbury Marsden's Cameron.
Job opportunities for people working in compliance rose 26 per cent in the three months to the end of January, while those in consulting increased 29 per cent, eFinancialCareers, a London-based careers website, said. Openings were up 41 per cent in equities and 30 per cent in fixed income.
Former London bankers are starting companies to profit from new regulation or areas where rivals have retreated, such as lending.
Haymarket Financial, for example, a provider of specialist financing to companies, has hired about 30 people since it opened last year. "Right now there are many more borrowers out there than lenders," says Haymarket chief executive Tim Flynn. "We'd be better off with more businesses like ours starting up because there is a need for more capital on reasonable terms."
Nasir Zubairi, meanwhile, wants to create a new source of funding for British companies. The former electronic-trading specialist is starting London-based EuroTRX, a trade- receivables exchange, to help speed payment of invoices to companies with £1 million of annual sales.
Zubairi wants to create an electronic market where new investors such as hedge funds and asset managers can buy invoices at a discount to face value from companies that sometimes wait 100 days for payment.
Zubairi may be part of a wave of London financial technology innovators, including risk-management company Hyper Rig and Funding Circle, an online market for people to lend directly to small businesses, says Julie Meyer, founder of London-based investment and advisory firm Ariadne Capital.
"New financial technology companies are emerging with entrepreneurs who see things that were either done wrong in the last credit cycle or who are spotting a gap," Meyer says.
- BLOOMBERG
