There’s a lot to be pleased, even smug, about if your name’s London. You’ve achieved a whole lot. Amongst UK cities and capitals across the world, it’s London that typically has the bragging rights. Take a bow, son. Recently voted by Mori the world’s most powerful city for the fourth year in succession – largely off the back of its cultural opportunities, airport accessibility, its universities, sports venues and its strong, job creating economy.
For an awfully long time, the capital has been a magnet for talent – just ask Dick Whittington. Quite apart from the financial lure – London’s professionals earn on average nearly £37k pa, some 16.6% higher than the national average – the capital represents a uniquely diverse, uniquely exciting, fast evolving, entrepreneurial centre.
My own conversations with TMP clients over the course of this year have evidenced no less than three major employers – within telecoms, food and beverage and insurance – who have railed against creating a London presence, only for the pressures of resourcing without the lure of a London address to force them into rethinking their approach.
If the global economy appears to be threatened by slowdowns in key markets such as China and a still moribund EU, then the UK labour market appears largely unaware. The most recent ONS figures, out earlier this month, suggested no let up in terms of competitive noise and activity. Employment in the quarter was up 140,000 and the percentage of those in work touched 73.6%. And the last time such a figure was this high since records began? It has never been higher since the ONS began comparable records in 1971.
And this is beginning to impact on the UK’s already disappointing productivity figures. According to REC, no fewer than 94% of UK employers are operating with limited capacity to take on additional work due to resourcing squeezes. This despite 76% suggesting economic conditions were improving and that around 50% were feeling that confidence in hiring and making investment decisions was improving.
If you are working for an organisation that is currently struggling to recruit either numbers or quality, consider this. The same survey suggested that 80% of organisations were seeking to hire permanent staff over the next quarter.
But if the UK faces even more pressures on both recruiting and retention, consider London.
London house prices have always divided opinions. If you are unlucky enough to be staring at a property through an estate agent’s window from the outside, with your nose pressed against the glass, then it has never felt more like a mountain to climb to become a property owner. If you’re either rich enough or old enough (or indeed both) to have property in your name with a London postcode, you look with quiet satisfaction on often double digit equity increases each year.
However, what shouldn’t divide opinion is the fact that this is increasingly a problem for everyone within the capital. In presentations to the new would-be mayors, Messrs Goldsmith and Khan (Mr Whittington’s successors), this month one in four London businesses suggested that the cost of housing and availability was having a negative impact on their ability to attract and retain employees.
The British Bankers’ Association has witnessed a steady shift of financial services roles out of London. In the period 2013-14, the number of banking jobs outside the capital increased by 2,450 whilst the number within decreased by a sizeable 4,848.
Perhaps even more significant, London First announced its ‘50,000 Homes’ initiative aimed at seeing the building of that number of new homes every year in London. The organisation recognised the impact that scarcity of housing was having on house prices – ‘The capital has a serious housing shortage that is starting to limit its competitiveness’.
The CEBR estimates that the housing crisis is costing the London economy no less than £1bn annually in terms of wage premiums and the inability of London employers to fill an estimated 11,000 jobs each year. To create some form of perspective, to pay for the average London rental, a typical barista would have to hand over no less than 112% of their salary each month, a care worker would be passing back 99% of their monthly take home and an education professional 58%.
And the same research which suggested that London pays the highest salaries inconveniently then went on to suggest that even this average salary would still see the employee some £964 in debt at the end of each month once expenses, much of them property related, are factored in.
Perhaps then no wonder that 2014 saw some 273,000 Londoners leaving the capital to live and work elsewhere.
Anecdotally, I ran several focus groups amongst Manchester based undergraduates this summer. Their clear view was that London, unless you were very well off or had family within the capital, was increasingly out of financial bounds – they couldn’t work there because they couldn’t afford to live there. I contrast this with graduating myself from a north west university nearly 30 years ago (that wasn’t easy to say) – practically the entire graduating year made their way down to London for work.
If we are not careful, the social mobility that London has always provided – ask Mr Whittington – will grind to a halt.
The pressure is then on London-based employers. If its people are feeling the squeeze and becoming increasingly tempted to sample life outside the capital, in order to both reduce housing costs and increase housing square footage, what then’s to be done?
Much of this is down to engagement – London’s employers persuading their people that they are wanted, recognised, front and centre, key contributors driving organisations on and being applauded, valued and rewarded for their efforts. More than this, according to a survey this month from Samsung, one in three Londoners would not consider a job offer if it did not include the opportunity to do some work from home. Flexible working was viewed as the most important element of a job offer. This was however in contrast to reality – 48% of respondents suggested that they have no choice but to work a five day week in their respective offices.
It’s also why initiatives such as Crossrail, the night tube and HS2 are so important. Having a transport infrastructure that can move working Londoners into and out of the capital quickly, efficiently and in some degree of comfort is critical.
It seems a clear choice. People continue to want to work for London-based employers. Because of the pressures on the housing market and the costs associated, they are increasingly less convinced they want to work for London-based employers in London itself.
Indeed, a significant element of the employer brands of London-based employers has been London itself. Perhaps we are not far away from London and its housing crisis beginning to detract from the employer brands of its employers.
And employment and location flexibility are likely to become quickly elevated from a relative nice to have into a recruitment-critical element of your offer, brand and proposition.
Getting to the heart of your employee mindset 
West Ham have incorporated the word London onto their badge from next season, the first branding exercise of its kind in the premiership.
LikeLike
If one arrives in London to study – regardless of financial pressures or housing etc – it becomes near-impossible to go anywhere else, unless one has a life-changing episode: children, predominantly. There's no getting away from the fact that London moves to a faster beat and that after here everywhere else is like Lilliput. For trolls out there, I'm a northerner, here since 78 and wouldn't be anywhere else. I've tried it. Didn't like it.
LikeLike