Things aren’t looking great, but they are looking better. Bob Diamond says this quarter is better than both the last quarter and the first quarter of last year.
But is there really any hiring? We asked five senior headhunters in equities, fixed income, and corporate finance – all of whom wished to remain anonymous. These were their verdicts.
“The RBCs and the Jefferies are still looking around and Berenberg is a bit active, but at the big global banks there’s nothing really happening. BAML and Goldman have been making more cuts in cash equities and it wouldn’t surprise me if others do the same.”
“BAML cut around 8-10% of its cash equities people in Londonlast week and SG cut researchers from some of its peripheral sectors. Deutsche is making redundancies in order to hire, and so is JPMorgan. UBS are likely to cut people so it can upgrade later. Oriel cut around 20 people a few weeks ago.
There’s also hiring. RBC, Jefferies and Berenberg are looking around and some RBS people have picked up by the likes of Kepler. Exane are also looking to improve. I’m working for a few people, but unfortunately I can’t say who.
If you’ve been made redundant in this market, it doesn’t mean you’re bad, but it will be difficult to get back in. There are a lot of decent people on the street.”
“There are spots of upgrading. A lot of banks had a pretty good first quarter and although some final cuts are going through, there’s some hiring. It’s not volume hiring though and it’s quite political – individuals in banks who’ve got management support to add headcount. I’m expecting some more cuts at Nomura before they pay their bonuses.”
“January and February were dire – everyone was focused on the bonus round. But now that’s after the way, people are starting to think about how they’re going to make money in 2012. It’s not going to be a busy hiring year, don’t get me wrong, but banks are definitely more focused on what they’re going to support and what they’re not going to support. They’re accepting that they might need to add people in certain areas.
At the same time, there’s the problem that people have been paid zero bonuses but haven’t left because their salary is high. Those people might need to be let go – there will be more selective redundancies.
In terms of hiring, it’s hard to draw out a common theme this year. Every bank is strong in different areas. One bank might pull out of an area because it’s not prepared to commit capital to it, but another bank will benefit from that and hire – you can’t generalise any more.
At the same time, banks are a lot keener to upgrade. Each seat is now getting heavily scrutinised – if you’ve got someone making $5m, but the seat is worth $10m and you can hire someone for the same amount as the incumbent, you’re going to bring in someone new. Banks with a strong fixed income platform, like Goldman or JPMorgan, are in a strong position to do this kind of upgrading – they can pick up exceptional people who just want to work on their platforms.
If you’re out of the market, you’re in a difficult position. The supply of people far outweighs demand. You need look at your options. We’re seeing some senior people getting out of the market altogether.”
“It’s very bitty and lumpy. Redundancies have been made investment banking and we’re not really seeing any more people coming out, but there’s not much hiring. It’s mainly the smaller and more opportunistic players that are looking at recruiting, but they’re being extremely selective and cautious. No one wants to add any cost. Investment bankers tend to be quite risk averse human beings and unless they can see their investment bringing in revenues, they’re not willing to commit.
What should you do if you’re out of the market? Persevere. Chat to your contacts. Try to get as many meetings as possible. It’s not that desperate out there. There are some people who’ve been out since August/September last year, but they typically got pretty decent packages, which have seen them through. No one’s really in panic mode, but they recognise the market is difficult. The bottom line is that people are speaking to people, it’s just very difficult to make anything happen.”
“It’s right to say there’s a lot of inconsequential interviewing, but there are also little areas of hope and a few opportunities. Boutiques are hiring and there’s demand for natural resources bankers and technology bankers across the piece, but it’s very selective.
If you’re trying to get back in right now, my advice would either be to take some time out or to cast your net fairly wide. There’s an issue with the model in investment banking and we’re seeing a lot of bankers trying to get into the corporate world. They’re saying that if you work for a corporate you have a busy life but not as busy as in banking, and you can be paid quite well – but not as well as in banking. It’s a trade people are prepared to make. I know an MD from a UK metals and mining team who’s moving across to a big metals and mining company.
Overall, it’s a difficult market. There’s a state of paralysis, no velocity of circulation in the hiring market and not much ability to upgrade. If you want to hire, it needs to be strategic. Asia’s dropped off, theUShas come back a bit,Europeis very varied. People are filling up their diaries with meetings, but not much else.”