eFinancialCareers

Equity research teams are starting to resemble an hourglass: all top and bottom with not much in the middle.

The situation will probably continue, with junior staffers being in the most demand for the next year or so. Jonathan Evans, managing director of search firm Sammons Associates, says banks’ research hiring requirements for 2007 are focused on people with between one year and 18 months of experience.

“There are very few teams now where you have a senior analyst, a junior a couple of years below him, and several juniors below that person,” says Evans. “It tends to be one high-profile person and four or five associates.”

Wall Street compensation specialist Johnson Associates draws attention to the phenomenon. According to him, the U.S. research market has split into two tiers: one comprised of visible seniors, the other of juniors who undoubtedly do much of the work. Meanwhile, the layer of mid-ranking research professionals has all but vanished.

Cost is undoubtedly behind all the trend. Unbundling and restrictions due to conflicts of interest mean research is an increasingly conspicuous cost, and juniors come cheap.

A rival headhunter believes the lack of mid-ranking research talent is good news for researchers with four to five years of experience. “There are some incredibly strong junior analysts who are now back-up analysts to the heads of teams - this would never have happened five years ago,” he says.