2016 may not be an easy year in which to find a new front office banking job. Most banks are cutting costs. Those that aren't are hiring 'selectively' and are abnormally fussy about who they take on.
We spoke to front office banking recruiters in London about what they want from candidates this year. This was what they said.
With banks watching pennies and the market awash with desperadoes who are willing to move for loose change, now is not the time to have a lot of stock that needs to be bought out. Especially in fixed income.
Nick Stevens, co-founder at CEO of recruitment firm Eximius, says: "There are jobs in fixed income, but proportionately there are a lot more candidates. As a result, banks have their pick of the candidates on the market. They’re increasingly taking a pragmatic approach and going for the candidate who is good and won’t require a huge buy out, rather than paying whatever it takes to get the best possible person.”
Russell Clarke, founding partner of Figtree Search, says the "sweet spot" now is at vice president (VP) level.
"Everyone's chasing the top 15% within the talent pool for VPs," says Clarke. Banks now want these highly competent experienced people who can be the "engine room" for their activities but who aren't too expensive. "If you're in this cohort, there will be demand for you across all desks - trading, sales and origination, fixed income and equities. This is where it's all happening," Clarke adds.
You don't want to be just above VP level, however. One M&A recruiter, speaking on condition of anonymity, says demand seriously drops off when you get to director level. "There are a lot of directors who've been made redundant. Banks are either hiring VPs to be the engine room or senior bankers who can bring in the deals. They're not interested in expensive directors."
If you are an expensive director level M&A professional who's out of the market, you'll need to adapt. "You either need to move out of the industry or to reinvent yourself," says the recruiter. "We've seen quite a few people move into corporate banking," he adds.
If you're not a high-performing VP, or a managing director who opens doors, you need to be the sort of go-getting 20-something who's willing to work 80 hour weeks for less than £100k.
At least, so says the head of one of London's recruitment firms which specializes in placing M&A juniors.
"We're so busy," says Logan Naidu, CEO of recruitment firm Dartmouth Partners. "It's only the first week and we're still finding there's huge demand for analysts and associates in M&A who've been well-trained at good banks."
And, if you're not young and uncomplicated, and you do have some stock baggage then you must - at the very least - be willing to swap jobs without expecting a huge uplift in your compensation.
"One thing people need to realize is that if they do move this year, it's not going to be for more money," says one equity derivatives headhunter, also speaking on condition of anonymity. "Banks simply aren't going to pay salespeople up in the way that they used to."
This doesn't mean that you'll get no uplift at all. It does mean that any uplift you get will be outweighed by the risk of moving.
"If you're in equity derivatives sales and you're earning £400k, you might be able to move to a new role paying £500k," says the headhunter. "After tax, however, that extra £100k will only be £50k - and that £50k will be partially deferred. If you're successful in your current job, moving for money just isn't worth the risk."
Instead, he says people are moving for other reasons like the opportunity to build a business and develop a franchise. Even this is risky, however. "If you move to a second or third tier bank for a promotion and it doesn't work out, then getting back to the top tier is tougher than ever."
Some recruiters are simply waiting for the fallout from the 2016 bonus season. Bonuses at US banks will begin to be announced this week and next, but won't be paid until late January and February. Thereafter, disgruntled bonus recipients are expected to look for new jobs.
"We're expecting a lot of people in IBD to move because they're unhappy with their bonuses this year," says Stephane Rambossen, managing partner at DHR International. "In investment banking, bonuses for 2015 are likely to be flattish and we'll potentially see a lot of churn as a result."
If you lost your job last year and you still haven't found a new one, you might be feeling panicked. Don't show it.
"There are a lot of very desperate people out there," says one headhunter. "People will do almost anything to get interviews with banks. A lot of stalkers," he adds. What are they doing exactly? "Calling me all the time, emailing me all the time, getting friends and clients to write in saying how good they are..."
Lastly, and in the spirit of compromise (3), headhunters want you to accept offers from tier three banks and below. This is where a lot of the hiring will seemingly be happening this year, especially if you work in fixed income. If you're holding out for a big job at a big firm, it might be 2017 or beyond before you get lucky.