As we noted earlier this week, with the end of summer an unseasonal bullishness is emerging on the hiring front.

Morgan Stanley and UBS are both seeking to fill gaps in fixed income, currencies and commodities, Nomura continues to recruit globally, and Barclays Capital, although it’s now filled lots of its vacancies is still said to be in the market in hot areas like rates. Moreover, the current expectation is that 2010 will be better still, with heads of recruitment predicting “significant investment” in employees come January.

However, by simultaneously staffing-up in flow product areas, banks may be setting the scene for redundancies in the eventuality that equity markets crash and credit markets are killed by interest rate hikes.

As the graph below shows, most firms have had an erratic approach to headcount over the past decade.

Recruiters say their clients are now claiming to be understaffed by as much as 30% in current hot areas like flow sales. “Most of them cut indiscriminately and the resulting gaps have left them under-exposed now that markets have come back,” says the director of one search boutique.

The head of recruitment at one bank with a big hiring programme says the emphasis is on adding staff as cheaply as possible. “We’re trying to go direct, or through internal referencing systems rather than using recruiters,” he says.

Headcount changes from 2001

Source: Banks’ annual reports (CS, UBS DB show investment banking operations only)