Investment banking operations jobs are coming back in from the cold. After years of offshoring, outsourcing and cost-cutting, the past few months have seen a surge in back office vacancies in London and on Wall Street to the point where a quiet battle for talent is underway.
Recruiters suggest that operations recruitment is suddenly hot. Saxton Leigh, a specialist operations recruiter, says that job numbers have returned to pre-crisis levels, while both Morgan McKinley and Robert Walters have pointed to an increase in demand as key positions move away from offshore centres, back into regional headquarters.
“The tightening regulatory landscape means that institutions are increasingly demanding closer control of their operations functions,” says Sally Martin, associate director of operations recruitment at Robert Walters. “As a result, from a risk and service perspective, many firms are bringing more complex roles back onshore.”
The key point here is that the jobs coming back onshore relate to either more complex asset classes or those that have a more strategic element to them. Goldman Sachs is hiring for derivatives operations roles in New York and London, as well as jobs related to regulatory reporting and the middle office. Morgan Stanley, meanwhile, is hiring for ‘operations specialists’ in corporate actions and OTC derivatives clearing.
Martin says that roles that banks are currently struggling to recruit for include anything related to risk and compliance, corporate actions, derivatives operations and regulatory operations and control.
Another reason for the “repatriation” of operations jobs to western locations is discontent with the way offshore centres have been running, says Hakan Enver, operations director at Morgan McKinley: “There are rumblings of discontent in global hubs due to the poor quality of the working environment and low salaries, Locations traditionally known as cheap sources of outsourcing services are becoming less popular because wage increases are making them less competitive,” he says. “To overcome this, one bank in particular has seen London based managerial responsibilities extended to manage teams in Asia to cut costs of having multiple managers in their satellite offices.”
Investment banks appear to be taking a dual approach to operations recruitment. On the one hand, pure transaction roles continue to be either offshored or outsourced entirely, even if this is closer to regional headquarters – see J.P. Morgan in Bournemouth in the UK or Goldman Sachs’ Salt Lake City operation.
Meanwhile, more complex operations roles, those related to middle office processes and key managerial positions are moving back to London and New York.
“The significant change is that firms are now looking for ‘thinkers’ rather than ‘doers’,” says James Holm, operations recruitment manager at Saxton Leigh. “By this we mean they’re increasingly seeking professionals with experience of problem solving and finding innovative solutions that could potentially save their employers money.”
Morgan McKinley says that average pay increases for operations professionals moving jobs is now 18.3% in London.
However, there’s still evidence that despite the increased demand banks are still cutting costs with their operational staff. “Candidates have previously sought ‘promotion platforms’ (promotion on entry to a new job) to make the step up when moving firms,” says Martin. “More recently, however, many banks have been reluctant to offer promotions to external candidates, instead offering competitive base salaries to those being paid below market rates and occasionally offering guaranteed bonuses.”