So you thought banks were rolling in talent, that job applicants were more plentiful than cicadas on the East Coast of America and that the 70,000 résumés received by Goldman Sachs each year are indicative of a huge cloud of brilliant bankers waiting to swarm over every top job that becomes available?
You were wrong.
Banking recruiters are having a tough time. It’s no for a lack of jobs – it’s because there are no candidates to fill them.
Plenty of ‘bankers’, no good ones
At last week’s investor presentation, Gary Cohn, COO of Goldman Sachs, said the bank receives 60,000-70,000 applications for its experienced positions each year. He also said that Goldman receives 17,000 applications for 350 summer analyst positions. But Goldman Sachs is Goldman Sachs. Smaller-name banks, which have typically been the biggest recruiters in each banking hiring cycle, are struggling to attract people – or at least to attract people of the calibre they want and need.
“It’s hard to find established bankers who will move from one institution to another,” said Michael Karp, the New York City-based chief executive of international financial services search firm Options Group. “At banks like Citi, Goldman and Morgan Stanley, people are very well established and unwilling to move. There has to be a compelling reason for them to join a new firm and often that reason is not compelling enough.”
Money is at the root of the problem. If you work in banking, changing jobs has become a risky business. In the past, bankers were induced to move by more money and a by big guaranteed bonus at the hiring firm. Now, banks are unwilling or unable to offer new hires a big pay rise; banks like RBS pay no guarantees. Last year, UBS offered only ten guaranteed bonuses to new “key risk takers” across the bank.
With higher pay no longer available to mitigate the risk of moving jobs, bankers going for new positions are relying on an entirely new concept to help ease the move: trust.
“People are having to trust the hiring manager at the new firm when he offers a purely verbal guarantee of a big bonus and says the new opportunity is a good one,” says Oliver Rolfe, managing director of London-based cash equities headhunter the Spartan Partnership. “It’s difficult because a lot of bankers have been burnt by being too trusting in the past.”
If top bankers won’t swap jobs because they’re not being paid enough to compensate for the risk of moving, something has to give. Hiring banks could lower their standards. Unfortunately, banks are becoming more fussy than ever. “There is a general perception that there are thousands of good candidates out there, but the reality is that hires will only be made when a strong and very suitable individual who matches the exact specification can be found,” said Simon Lindrea, operational director for finance at recruitment firm Michael Page in London.
Goldman’s data is misleading. Goldman Sachs may receive thousands of CVs, but recruiters tell a different story. Aspiring bankers may still be as plentiful as cicadas. But good bankers – whom banks actually want to hire and who are actually willing to move – are still as rare as hen’s teeth.