Demand for finance staff falls

Subprime crisis bites local banks and financial institutions.

bank earning pic 88 298 (photo credit: Ariel Jerozolimski)
bank earning pic 88 298
(photo credit: Ariel Jerozolimski)
Although Israeli banks and financial institutions have weathered the subprime mortgage crisis better than their US counterparts, first signs are emerging that the crisis is hitting demand in the local financial job market. "The capital-markets sector is the first to be hit by the impact of the US credit crisis on the Israeli economy," Shelly Saar, CEO of Manpower Professional, an employment agency, said Thursday, commenting on the results of the firm's quarterly survey of help-wanted advertisements placed in the Hebrew press. "The downturn in the demand for workers was felt mainly in the second quarter of 2008." The Manpower Professional index showed that in the second quarter of this year, the demand for finance professionals fell by 22.1 percent compared with the same quarter last year and by 7% compared with the first quarter of 2007. In addition to a significant downturn in the demand for finance workers, especially management positions, during the surveyed period, many employers stopped hiring and cut human resources. "It is interesting to note that although the subprime crisis broke out about a year ago, the sector has remained stable to a certain extent for three consecutive quarters before the steep downward trend in the recent quarter," Saar said. The biggest drop was found in the demand for management positions, which fell by 29% in the second quarter of this year compared with same quarter in 2007 and by 26% in the first six months of the current year. "The demand for workers in management positions has been on a continuous downward slope since the third quarter of 2007 as a result of the impact of the US credit crisis onto the local economy," Saar said. "In times of uncertainty there is a tendency to put a freeze on, or cut, senior positions, which are mainly management positions. We expect this trend to continue, particularly at export companies, which are being hit by the sharp depreciation of the US dollar, and at finance businesses, which are directly affected by the subprime crisis." In the rest of the economy, demand for employees in human resources - the first sector where demand grows in good times and falls during slowdown - plunged 16% in the first half of 2008 compared with the corresponding six months of last year. Second-quarter demand was down 14% in quarter-on-quarter comparison and 3.5% down compared with the preceding quarter. Demand for sales and marketing staff in the second quarter of this year continued to plummet, albeit at a slower rate compared with the first quarter. Demand was down 8% in the second quarter compared with the corresponding quarter and 5% in the first half compared with the corresponding half. "We believe that the fall in demand will ease and could reverse at some point," Saar said. "In particular, in times of economic slowdown, businesses and companies tend to invest in good customer-service as they fight for every customer and therefore need to provide the best service possible. "Generally, there is always demand for sales representatives and during economic downturns it is rising, as sales give companies some air to breathe."