Financial sector edges slow ahead

IT MAY only be a crumb of comfort to those who lost their jobs in the meltdown that followed the banking crisis, but there are signs that the financial services industry in Edinburgh is recovering, albeit slowly and slightly.

Given the industry still employs more than 90,000 people across Scotland, the question could be asked why so much fuss was made about two companies' recent announcements that they are recruiting about 150 staff across Edinburgh.

The reason for the hype was simple - the companies involved are high-profile within the global financial sector, and their commitment to Edinburgh is seen at the highest level as an encouraging sign.

The bigger of the two, State Street Corporation, announced that it is increasing its Edinburgh-based workforce by 90 from 750 to 840 in creating a European Centre of Excellence in its cash servicing operations.

State Street, one of the world's leading providers of financial services to institutional investors, has 1.2 trillion in assets under management, and operates in 26 countries and more than 100 markets worldwide.

BNY Mellon, with 733 billion in assets under management, is increasing its staff in Edinburgh by 60 to 650.

Both companies have been in Edinburgh for a number of years, and Scottish Enterprise and Scottish Development International were anxious to keep them here and worked hard to assist their growth.

The fact that they are increasing their presence is seen by the Scottish Government as very good news. Of State Street, cabinet secretary for finance, employment and sustainable growth, John Swinney said: "The company's decision to increase its Scottish presence through the creation of a European Centre of Excellence is testament to the quality and skills of the local workforce."

In general, said Swinney, the Scottish Government is doing what it can to help the financial services sector grow again.

He said: "We are working with the industry to strengthen Scotland's position as a global centre for financial services and this new investment marks further growth in this important section of our economy."

Despite this good news, there is no doubt that the financial services sector in general is holding back on hiring new employees - or re-hiring former staff - due to a lack of confidence about the economy.

It may take many months yet before a real jobs boom occurs, and the nature of the jobs may be different. There is anecdotal evidence that recruitment companies have been carrying out sporadic campaigns in which they have deployed staff for their clients in the industry, but these jobs increasingly tend to be on short-term and temporary contracts in customer service centres, even if they can last for months.

It seems the industry is hesitant about employing people on a full-time basis, and there is little doubt that banks in particular are wary of saying "let's get back to business as normal" when "normal" is unlikely to recur for a long time, if ever.

The present debate about regulation of banking and the financial sector could be stopping companies from taking on staff. Harris Keillar, managing director of Edinburgh and London-based Keillar Resourcing, recently said of the sector: "It's doing OK. It is buoyant, people continue to hire but there are no dramatic increases at all.

"People aren't feeling all that confident about the economy. That's holding things back. But, in the financial services sector it's regulation and the whole atmosphere surrounding that debate that's holding things back."

So while the signs are encouraging, they are not yet pointing to rude good health in Edinburgh's financial sector. That would appear to be some time coming.