While Europe is in the doldrums, the US – generally, seems to be doing a lot better.
US M&A has been booming this year but European M&A is at its lowest level since 2003. US banks have been adding jobs in the US, even while jobs in London have been disappearing. Deutsche wants to invest in US corporate finance and equities, even while it’s slimming down in Europe. Nomura has been hacking away at its European investment banking jobs and the Brookings Institution-FT Tracking Index suggests the US is a beacon of hope in a dismal economic landscape.
The two graphs below, taken from JPMorgan’s recent report on the state of the banking industry, reflect the general health of the US banking jobs market. Countrywide, brokerage employment has been fairly stable since 2002. In New York, financial services employment fell off a cliff following the events of October 2008, but has been slowly creeping back up again.
So, can you get a job on Wall Street?
In light of the comparative health of the the US market, what are the chances of getting out of gloomy Europe and into ebullient North America?
Unfortunately, low. When we spoke to US headhunters, their feedback was all too reminiscent of the headhunter-feedback we’ve been getting in London.
“At this time of year there’s not a tremendous amount of hiring going on,” said Kathy Tompkins, a consultant at Sheffield Haworth in New York. “It’s much more about selective upgrading and restructuring.”
“I haven’t seen much hiring happening at all,” said David Schwartz, CEO of US search firm DN Schwarz & Co. ” I don’t honestly think that there have been more than a handful of important searches in investment banking in the US over the past 12 months. Banks are cutting people all over the world and are looking to redeploy them. Most people are focused on holding onto their jobs – if you get cut now, it’s very hard.”
“In the last year, US hiring has slowed tremendously, even in terms of upgrades,” says Michael Karp, CEO and founder of search firm Options Group.
This all sounds very much the same as the City: fundamentally, there’s very little hiring. Banks like Nomura, which were recruiting on Wall Street last year, are pulling back and there’s no sign yet of Deutsche’s big US push. It doesn’t take a genius to see why: McKinsey’s big banking report, out today (of which more later), stresses that US banks still face, “significant challenges.” Revenues across the industry are growing by little more than 1%, margins are down -48 basis points since 2010, and cost to income ratios are rising. US banks are, “still very far from earning their cost of equity,” McKinsey reminds everyone.
After the election? In 2013?
The good news about the US hiring market is that headhunters are expectant of a recovery after the election in November.
“Corporations currently have healthier balance sheets and business leaders are waiting until the US Presidential election is over before they make their next move,” says Tompkins.
“After the election, it’s possible there will be a gearing-up,” agrees Karp.
However, even if US hiring is fired-up by the election results, opportunities for European bankers in the US are likely to be very limited. The US market has its own surplus of unemployed bankers. At best, Tompkins suggests there might be a need for international specialists in esoteric product areas or for people with a, “broad product reach and a global customer base.”
As in Europe, Karp says the big demand in the US is for people with expertise in risk and regulation. Next year, he says banks are talking about selective hiring related to rates, FX, emerging markets and emerging markets equties. Asset management and hedge fund hiring remains hot – particularly for investor relations and marketing roles, but US experience is paramount.
If you want to get out of the moribund European market and to move to Wall Street, your best option may therefore be to move internally. The head of recruitment at one US bank said they’re actively attempting to shift senior people out of London and into New York. Christian Meissner at Bank of America moved his family from London to New York during the summer, but still spends half his time in London. Where Meissner has gone, other senior bankers may wish to follow.