"I think it's been a combination of a horrible first quarter and the looming referendum that's contributed to somewhat muted hiring start to the year. That said, Q2 is shaping up to being much better, so let's see how this will play out," said Joseph Leung, Managing Director at Aubreck Leung.
While adding that the banking industry has already been hit by regulatory changes and higher costs of capital, Leung adds that if a Brexit happens then it will open a whole "new can of worms" and challenges.
London is home to 729,600 financial services professionals, a number that is 14.7 percent above the low seen in 2010, according to a survey conducted in October last year by industry body TheCityUK. Across the UK, this numbers jumps to 2.2 million employed in financial and related professional services. Furthermore, around 35 percent of EU wholesale financial services activity takes place in London and over 126 companies from other EU member states are listed on the London Stock Exchange (LSE).
Analysts have warned that if these companies were to consider moving in the event of a Leave vote, or relocate some of their staff or business, the potential impact on the U.K. economy could be huge. This could lead to reducing domestic employment and tax receipts. But for now, the uncertainty too seems to be having a major impact on hiring and remuneration.
"The uncertainty surrounding the EU referendum has already led to delayed investment decisions and hiring plans, with many firms waiting for the outcome of the vote on 23 June," said Chris Cummings, Chief Executive of TheCityUK.
He explained that in the event of a Brexit, many financial services firms that are already based in the UK to gain access to the EU Single Market and its 500 million customers may consider relocating operations and jobs to other centres across the EU to "enable continued and unfettered access."
A number of banks have warned their employees of job cuts if Brexit happened. Recently JPMorgan chief Jamie Dimon said the bank may cut up to 4,000 UK jobs if the U.K. decided to leave. He said Brexit would be a "terrible deal" for the U.K. economy.
Citi has also warned its U.K. staff that it could redeploy its British businesses around Europe if it voted to exit the EU - dealing a blow to London's status as a financial hub. In a memo to employees, Citi's U.K. country officer said "we would need to rebalance our operations across the EU in order to access markets enabled through the European passporting regime."