Capital salaries slide as credit crunch bites

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SALARIES for new jobs in the Capital have shown the first signs of being hit by the financial crisis.

An analysis of advertised vacancies has found that the average salary in the city is now 240 lower than it was a month ago.

Business leaders warn that the figures are a sign of companies "batting down the hatches" during the current economic gloom and it is feared that salaries will continue to plummet for the next year.

The data comes from an analysis of the 18,222 Edinburgh jobs advertised between April and September on jobs website AllTheTopBananas, which advertises one third of all UK vacancies.

The average salary is now 31,563 – compared to 31,803 for the six months to the end of August. It is the first time there has been a reduction in Edinburgh in the 12 months since the data started being gathered.

Dave Martin, the recruitment site's managing director, said: "This seems to be another symptom of the credit crunch and the general economic woes the country is going through. We had seen strong growth in advertised salaries for 12 months. This is a sudden and unexpected drop.

"It's possible that, despite the rise in the cost of living, recruiters are responding to the uncertainties over how businesses will perform in the next year and are reducing salaries."

A number of companies have made staff based in Edinburgh redundant in recent months.

Among them were 30 redundancies at housebuilder Cala last month and 19 at investment manager Martin Currie. Job losses in August included ten at estate agent Leslie Deans and eight at Malcolm Fraser Architects.

But many more companies are said to be taking a more prudent approach.

David Lonsdale, assistant director of CBI Scotland, said: "Certainly, firms are looking increasingly closely at all of their outgoings. We have seen a number of redundancies, while other firms in the area are having wage freezes, eliminating bonuses and looking at other ways of eliminating costs.

"One reason that this has happened will be the downturn in the financial services, which is a big employer in Edinburgh. There may be fewer advertisements for jobs in the financial services and banking sectors, which traditionally pay very well, so that would have an impact on average salaries."

He said that the average salary – as well as the number of jobs becoming available – was likely to fall further in the coming months.

A recent report by property firm Atisreal suggested that 11,000 financial service sector jobs in Edinburgh would be lost by the end of next year.

"Our own recent business survey showed a pretty negative outcome for hiring and recruitment in the coming months," said Mr Lonsdale.

"Certainly, the indications are that things are going to be pretty poor in terms of hiring and recruitment. Companies are just batting down the hatches and looking to get through the coming months."