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It is, perhaps, early days to be suggesting this, but with most investment banks making redundancies, are recruitment firms servicing the City also likely to reduce headcount?
Certainly, the precedent is there. During the height of the financial crisis, large financial services contingency recruiters were quick to make redundancies and in some instances staff numbers only recovered towards the middle of this year.
Banking cuts were, of course, deeper in 2008 and (despite comparisons) sentiment decidedly more downbeat than now. However, some financial services recruiters – notably Michael Page, Robert Walters and Hays – were increasing headcount relatively aggressively late last year.
Concerns over banks’ hiring freezes, which could be in place for the rest of the year, could prompt some recruiters to take pre-emptive action and trim headcount.
So far, though, there’s little evidence of this happening. Gabby Gerra, director of recruitment to recruitment firm Orint, says redundancies haven’t been mentioned at large City-focused contingency recruiters, but any new hiring is now very selective.
“The fact is, nine months ago recruitment firms were struggling to find sufficient supplies of talent and, having let people go during the financial crisis, are conscious of how difficult it is to replenish numbers when they need to,” she says. “Any new hires now are only for people who can bring in a new revenue stream. Firms have no appetite to recruit people just to manage accounts.”
By their nature, contingency recruitment firms chase volume hiring areas. While the lack of investment banking hiring will, of course, hit hard there are still growth areas – notably support functions, back office areas, compliance, change management and, to some extent, IT.
“It’s been a bad couple of months, but we could continue to operate at the current levels and still look to expand our business,” claims one director of a financial services recruitment firm. “It’s generally a transient industry anyway – most people stay here a couple of years, then get a better offer, don’t make the grade or decide recruitment isn’t for them. We could reduce headcount just by not replacing people, without the need for redundancies.”
Perhaps boutique headhunters focused on niche areas of investment banking are in more danger of losing people, or just shutting entirely. Last year, for instance, there were a number of start-ups focusing on the then-buoyant FICC space, which has subsequently taken a beating.
In the current climate, clients look for “trust and longevity of relationships”, says Jonathan Evans, chairman at headhunters Sammons Associates.
“The second half of the year will be a litmus test for any firms established on weak foundations. Headhunters recently set up to pursue short-term demand will struggle,” he says.
Wouldn’t be before time…
utter tosh..we are still trying to take on scads of people into our search group.
we cant find the staff with the relevant telesales experience..if you know of any redundancies in search firms…push them our way, but they gotta be good on the phone
Looking forward to all the sad, bitter, banker comments on this article!!!
Wow, ‘good on the phone’. Whereever will you find such a rare skill-set?
How about Foxtons?
Banks will reduce headcount in the F/O by 5% between now and year end. Every bank in its 2nd Quarter statements referred to having to pick and choose which products they actually competed in …ie they are going to withdraw from some areas. This has a correlated effect on the support functions that support that activity – ie that number will come down too.
Also taking into account that its likely that Banks will reduce ROE over the next 2 years this doesn’t smell very god for the job market – anywhere….
Recruiters don’t create roles ( though the fancy ones think they do) – they are entirely reactive to their clients …ergo if you own a recruiting firm / search firm I would batten down the hatches, think about the sustainability of your business model in a very different , continually cost conscious low growth industry.
Hey Daveb. Bet i earn more than you. Yes im a head hunter. Mwa ha ha ha ha
I seriously doubt that. Seriously.
Daveb, no no, honestly I bet i do. Really. Believe me. Funny actually, I had a “hater” send me her CV today, they always come running.
@Philj – Search…and Telesales? An oxymoron methinks.
iearnmorethandaveb I totally agree! The other thing is, wait for it, I really enjoy my job too.
What is this a self-appreciation society for recruiters? You are all leeches.
Haha, sorry King of the big swingers ? and you lot aren’t responsible for messing this economy up? I guess we’re guilty for finding you jobs. I feel dirty pimping you around but someones gotta do it. But in all seriousness now, you are my bitch. Leeches?
@King – Enjoy receiving your ‘threat of redundancy’ letter, and I look forward to receiving your CV!
All of you – bankers and recruiters – are just a bunch of cockroaches. You don’t “make” anything, you lack creativity, possess little humanity and spread materialism and greed like viruses. As for ethics and moral compass, these notions seem to have bypassed you all. You are true scum.
I should know – I’m in the business.
We are all overpaid scum. Just don’t let the cat out of the bag.
Just to inject a brief note of sanity into this witty banter, I run a specialist recruitment firm and yes, whilst there might be some storm clouds ahead which require even tighter ongoing control of our P&L, we are continuing to expand and continually seeking high quality consultants who can add value to all sides of the recruitment process. As an ex-banker myself, I remember what I was looking for when I was job-hunting – a true, impartial consultant who understood my business and had my best interests at heart. Both our clients and candidates receive a bespoke, value-added service and are appreciative of it. If you follow the mantra ‘do unto others as you’d have done unto yourself’ then you won’t go far wrong. I’d offer that many of the contributors to this piece should reduce their self-loathing and focus more on being the best they can be whatever their role within financial services; it wil be to their, and our industry’s benefit, in the long run.
@ Paul Chapman – Send me your details, I want to try your service. All recruiters promise to be different but they tend to be equally rubbish.
Google us at Hornby Chapman. Happy to be tested and the results broadcast. We advise roughly 20% of candidates to stay where they are as the grass isn’t necessariy greener and an internal move into a different division might provide the ‘progress injection’ they need for their career. Do bear in mind that we’re very much a specialist firm which focuses on senior asset servicing professionals; no temp, no IT, nothing junior. Thanks, Paul
@ Paul Chapman – Thank you for the details. One of my friends used your firm, his experience was very positive. There are recruiters / rec firms which are really good and ethical, yours is one of them! Good luck in this difficult environment.
Haha, the bankers think the recruiters are a bunch or morons and the recruiters think the bankers are a bunch of morons. When will they realise…..?
@ Paul and eFinancial – So you won’t let candidates who have had horrible experiences with recruitment firms voice their opinions on said firms here but Mr Chapman is free to shamelessly plug his two bit company as much as he likes?
What I find amusing is that so called senior specialists recruiters such as Hornby Chapman (who was commenting earlier), cliam to cover the senior end of the market. Yet advertise roles?!?!?! a TRUE senior specialist consultancy would never do this, as we all know the best individuals do not apply to jobs they are required to be head hunted, hence the difference between Search Firms and Contingent recruiters who say they cover the senior end of the market but in reality thety arn’t. This is one of the main issues in the market …! I am not saying that contingent recruiters can not be good but you give the true advisory search businesses in the market a bad name by your understanding of what you feels qulifies as a Senior role. FYI – successful search can earn packages well in excess of 350k and thats in an average year. ..hence again the difference in calibre between a Contigent Recruiter and a search consultant…
There are two things that need to be noted here, due to the fact that typically, the people that post comments on this site are bottom dwellers. Good bankers and good headhunters do not have the time for this rubbish, therefore the opinions matter very little. I am writing this because it was emailed to me, and I found it amusing.
1. The people aggressive about recruiters are angry for one reason… They are useless. Confirmed by the fact that they only dont like recruiters because they failed to get a job through one. Truth be known, if they were the best candidate, the job would have been theirs.
A good candidate, WILL get a job either though a recruiters or by them self. The latter is rare, yet does happen. The flip side of that is, good candidates are spoken to by the best SEARCH firms, not contingent number game players.
2. A good headhunter works for a good search firm, and will rarely come on this site, if ever, as they do not advertsise, they do not search online databases, and they certainly do not want nor need to self promote themselves on an online forum. They know their markets and HEADHUNT people. Sadly there are alot more sheep on the earth than there are wolv
@ Bateman – Man, you are so stupid that you can only be a recruiter. “The people aggressive about recruiters are angry for one reason… They are useless. Confirmed by the fact that they only dont like recruiters because they failed to get a job through one. Truth be known, if they were the best candidate, the job would have been theirs.” This statement of yours demonstrates how brainless you are. I got all my jobs through recruiters but I still hate all of them simply because they are all SCUM.
@Bateman – Would disagree that it’s rare for the good candidates to not get jobs through a headhunter. The fact is that the absolute best of the bunch are generally well known across their chosen market by reputation alone. These people rarely, if ever, need to deal with headhunters as the serious call will have a higher probability of coming in direct from the client, prior to the mandate even being considered for search. Otherwise I would have to agree that you are largely on point with your comments.
Also, I work for one of the larger search firms (top 5 ranking on executive grapevine, if that counts for anything). You’re right (for me at least) in that we do not look on here all that often, being too busy with our mud soup and charcoal arugula most of the time. On a Friday afternoon in silly summer holiday season in the middle of a major market slow down however, I think it’s forgiveable :)
EZ, I agree with you to a large extent (I also work at search firm). Good candidates work with head hunters more so than doing their own direct appraoch. Not only do consultants provide a portal to the international market but also take away personal relationships in small markets as a third party is able to intermediate the process. We are also able to engineer and make things happens.
Banker dont underestimate the value recruiters can add, especially at the top end of the market, they are not necessary all young chaps with spikey gelled hair carrying black files. Far from it, many of the people at my search firm are ex industry and making more in search than naking..for eaxmple one member of my team last year earned 700,000k
‘whilst there might be some storm clouds ahead which require even tighter ongoing control of our P&L’
HA! Your going to need more than control of your PnL. How about some bullion and a luger? And as for,
‘Banking cuts were, of course, deeper in 2008 and (despite comparisons) sentiment decidedly more downbeat than now.’
HA! again. Look at some numbers guys. Macroeconomic sh*tstorms are brewing.