Making the move to pursue another opportunity can be risky. But many recruiters are optimistic that the financial services industry will see an uptick in hiring this year. Here's what you should consider before moving to a new finance job.
Deciding to change firms for the opportunity to earn more money isn't wise, because it can often blind you to the downsides of a new role.
“If you’re making the job change simply for money, then it’s probably not the right job, and I can almost guarantee that it’s not going to work out,” says Mitchell Peskin, partner and executive vice president of financial services recruiting at The Execu|Search Group.
Find something that's likely to benefit you long-term. If you're accepting a lower salary, then it should be for a better platform, greater bonus potential or more attractive promotion opportunities.
“If you’re going to make a change, then you want to go to a better company,” Peskin says. “It should be for more money and more responsibility or a better job description, or a more interesting role, or a role where you can pick up additional knowledge that you didn’t have previously."
The size of the company you are considering going to is a factor. Bigger isn’t always better.
“Understand what kind of banker you are – a cog in the machine or entrepreneurial,” says Cesar DeLara, senior consultant in the investment banking practice at Selby Jennings. “For the latter, go to a boutique or a middle-market [investment banking] environment, because you’ll get recognition and achieve career growth based on your personal performance, as opposed to the larger banks, where it can be more dependent on how your group or the firm as a whole did that year.”
The onus is on candidates to do research to gauge a bank’s stability, says Reshma Ketkar, director and the head of the long-only investment professionals recruiting practice at Glocap Search.
“Take a look at fund performance over multiple years and investment cycles, comparing it to relevant benchmarks and peers when appropriate, investment team bios, top holdings and assets under management, looking at year-over-year growth,” Ketkar says.
It’s better to be an additional member of a growing team rather than a replacement hire.
“Making sure you’re moving to a growing platform is important, being an addition to a team rather than a replacement,” DeLara says. “If you’re the latter, be wary, because it shows the performance is bad or it means someone left the firm for another reason."
It possible to be at the same employer for too long. There are vast swathes of VPs and directors in investment banks who fail to make the step up to managing director – but switching jobs doesn't have to be about moving up in rank. It could be about an opportunity to learn something new.
“Generally, where we are in today’s market, if you’ve spent 10 or 15 years at the same company, and that’s your one and only job out of school, then it could be looked at negatively if you haven’t shown progression,” Peskin says.
Sometimes you have to make a leap into the unknown in order to take the next step in your career progression.
“When I’m giving advice on whether a candidate should make a move or stay put, I concentrate on the platform and their long-term career goals rather than money,” says Mike Karp, the CEO of recruitment firm Options Group. “Does the position offer more responsibility – a broader mandate?"
The flipside? Moving too often can be perceived as a big negative.
If somebody is job-hopping every couple of years, then that’s going to be looked upon negatively. Hiring managers want to hire someone who will stay at their firm long-term.
While two years is standard for a first job out of school, your second job should be a three-to-five-year stint, give or take, for gaining a solid base of on-the-job experience and serving as an effective stepping stone to further career success.
“At that point, if it’s working well, then you stay, but if not, then that’s certainly a good time to look for your third job,” Peskin says.