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Recruitment reality check: how bad is it?

Banks may be falling out of bed, but is financial services recruitment still comfortably under the covers? That depends who you talk to.

The optimist

Katherine Howe at KHG Partners, a boutique which places investment bankers and private equity professionals, says business levels are consistent with last year: “Although some of the larger banks have stopped hiring, a lot of our boutique clients see this kind of market as an opportunity to attract good candidates, so overall our business levels are similar to last year.”

Howe’s optimism is borne out by figures from the US, which show that there at least, securities firms added 6,500 staff in the second half of 2007. Similarly, a recent study by recruitment firm Morgan McKinley suggested 72% of financial services employers expected employment levels either to stay the same or increase in 2008.

The pragmatist

Adrian Kinnersley, head of financial services recruitment at Astbury Marsden, also says things aren’t as bad as they seem: “Based on the number of jobs that have been released and the feedback we’re getting from clients, it doesn’t appear that it will be as dire as the press are reporting.”

Kinnersley does, however, predict that business will be slower than it’s been over the past two years, with banks more precise about who they plan to hire: “They will hire in specific areas, rather than generically like last year.”

The only cloud on the horizon is reduced recruitment at the consultancy firms that deliver services to investment banks, a trend that historically portends lower recruitment at banks themselves, says Kinnersley: “If the banks stop buying consultancy services, the next step is to reduce investment in their own workforce, but this hasn’t happened yet.”

The pessimists

Of the four financial services recruiters we spoke to, two were pessimists, and (as both work for listed companies) neither wanted to put their gloom on the record.

“Recruitment is certainly a lot less than last year at this stage,” says the head of financial services at one major player. “If people say it isn’t horrible they’re putting their heads in the sand – I’d say it’s down 30%.”

Recruitment in London and Wall Street is up the creek, confirms the head of another international firm: “Things are bad out there, particularly for recruitment firms built around a candidate driven model – there are just too many candidates and not enough jobs. The only place that is really ok is Asia.”

Pessimism may also be well founded from a job seeker’s perspective: hidden towards the end of Morgan McKinley’s press release are two ominous stats: new jobs fell 19% in December 2007 (vs Dec. 2006); new candidates rose 34% over the same period.

Comments (18)

  1. “Kinnersley does, however, predict that business will be slower than it’s been over the past two years, with banks more considerate about who they plan to hire”

    Its nice that people are being “considerate”. Do you need a thesaurus?

  2. I agree with the Optimists…from a personal point of view I am busier now than I have been for months! Again personally, this is the busiest January I have worked through in over 8 years of City recruitment…and Im loving it !!

  3. If you’re not busy, you’re not good enough.

    I know we’ve been rushed off our feet in the past few weeks.

  4. It’s completely hectic here. I can’t believe anyone can say business is down, they must be having a joke! I’m only just on my lunch break now and doubt I’ll get out much before 10 tonight – the same as the last couple of weeks. I’m almost looking forward to a dip in the market!!

    (Everybody Loves) Raymond Reply
  5. We are a small boutique asset management recruitment business, and we have more jobs on in January than we had 12 months ago. That said, we also have had a number of larger fund management clients who have frozen all hires until there is a little more clarity over how the markets are going to perform over the next 12 months.

  6. ” HELP, my head’s stuck”
    “I’m over here in the sandpit”

    Desperate headhunter Reply
  7. A ‘six and two threes’ situation:
    Assignment levels remain healthy for those who have developed and entrenched reputations for consistency, hard work and delivery on behalf of clients – all provided at a sensible price.
    If market conditions makes it tougher for those ‘non-subscribers’ (of which there still appear to be many), then perhaps a correction is both overdue and to be welcomed.
    Perhaps only the fittest will (and should) survive?

    Wealth management recruiter Reply
  8. It must be busy out there….thought only people like me could afford the time to look at this site during working hours…

    Retired and bored Reply
  9. Guys, to add a bit off reality here. comments like busier then ever etc. do not help, recognizing the fact the headhunters have to keep up optimism. but it is a kick in the face for all the people having been laid off in recent weeks. And it is simply wrong.

    However, from two large deals we know from the financing end, that our banking friends are in rough shape. There is not much going on, apart from plain vanilla stuff. like it or not. anything complex is not welcome. on the credit end the backlog is still large. that the French screwed up again does not really help either.

    so guess it will be the summer until things will lighten up again…

    as a final note, given it is sunday.

    “…for those who have developed and entrenched reputations for consistency, hard work and delivery on behalf of clients – all provided at a sensible price. If market conditions makes it tougher for those ‘non-subscribers’ (of which there still appear to be many), then perhaps a correction is both overdue and to be welcomed…”

    what the hell does that mean? This is clearly and by far the most unsensible, least intelligent comment i have seen. what tree have you fallen off..

    Hanging in there Reply
  10. Guys- some feedback from the real world.

    Overall recruiting situation is appalling. Banks are cutting recruiting classes, existing staff levels, and comp for new and existing bankers. This is not just structured finance, have you bothered to read the headlines about Citi, DB, ML, etc? Sure, in select areas (structured rates, etc) people are adding staff. But, lets keep in mind a lot of investors have been blown up, the markets are off to a slow start, and we have seen the tip of the iceberg with respect to provisioning. The fact that a couple hedge funds out there might be looking for a few second year i-banking analysts isn’t going to save house prices.

    I speak regularly with about 10 head-hunters. To quote one (of the largest) “it’s not just that we have no mandates… it is also worrying that I don’t know of any away from us either…”

  11. I am snowed, it is a great time. I am building a staunch pay packet!!!!

    Lopes the Recruitment Machine Reply
  12. I am a Financial Analyst working for a corporate bank in the city.
    From my experience, I think the recruitment market is busy at the moment as the so call headhunters are calling me everyday for positions that they are recruiting for. Any one who say the market is slow should look at his/her Cv again.

  13. Phone jockey’s working back office roles may well confuse the annual post-christmas churn with ”never having been busier”. Monsieur Kerviel and sub-prime losses have seen an upturn in demand with my colleagues working middle office roles, control function recruiters will have a good year methinks. It is not a happy time to be a front office recruiter – mandates are nearly non-existent and the level of demand is being constipated by the level of uncertainty in the markets.
    If the past is anything to go by, we could see a dead-cat bounce later in the year, when the bulge-brackets realise they have let too many critcal peeps go and need to re-hire them, injecting some much needed demand back into the market, getting the gravy train back on the rails…fingers crossed.

    Knot as big as your fist in a polyester tie Reply
  14. Face it….it’s goodnight vienna.

  15. its likely that these business knowledge will help me my
    careers and go to the place of my dreams. otherwise I’m
    happy that i have gained much of business knowledge.
    thank you. can you please tell me more about ACCA and
    how it help me to achieve my dreams.thank you again.

    abdullahi adan Reply
  16. I have just given up a career in Law to pursue one in Banking and Finance.Bearing in the mind the present climate, dumb or smart move?

    Eddy,New To The Game Reply
  17. Eddy, Compliance has been a growth area for years and the recent stories from SocGen will not do anything to dampen that.

    And to add to the comments above: ABS may be in the pits right now, but PWM is holding fast and healthy, thank you very much.

  18. for the past 10 years i have produced revenue in excess of 750,000 and some years well over 7 figures per annum.
    This year if i am to produce that much i know that i will have to work 3 times as hard – something which isnt feasibly possible.
    There is still alot of work on but the deals are falling to pieces at the last hurdle. The bid offer spread is so large that getting people to move requires an understanding of the candidate base that this year will be a BAD year for bonusses. Unfort most of the good people ( ie the people headhunters approach) are still operating in a bubble, despite being aware of how poor the overall climate is. Carzy counter offers have been occuring on a weekly basis – 30% premiums for those being asked to stay – thats on top of 30% premiums last year. Its a dangerous startegy to deploy as it will create a huge pay divide at the end of this year – all the same it is happening. I am now seeing trades being proposed as -20% of last years pay, acting as a floor – however most people want shag pile on that floor – and are happier to stay where they are known rather than chance there arm at a new firm. the climate has changed – best get back to work.

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