Recruiting goes global as skills search widens

Yet the transformation in personnel that has taken place since the mid-1980s is quite startling. Dominic Duffy, head of the financial services practice of headhunter Longbridge, says his firm conducted investment banking searches in nine European countries last year.

Tony Tucker, managing director of headhunter ERG, reels off a list of names of candidates and interviewers for investment banking jobs in London. They include Italian, Polish, Greek, French, Indian and Chinese names - some UK nationals, some not. 'If I were doing that 10 years ago, it would mostly be names like John Smith interviewing Paul Brown,' he says.

Internationalisation is not uniform. Certain areas, such as derivatives trading, for example, which is international by nature, attracts many nationalities, whereas corporate broking is still UK-dominated.

Whatever the area, however, many people believe that the proportion of overseas nationals hired in key markets such as New York, London and Frankfurt will increase further.

The drivers behind this internationalisation of personnel are not hard to pick out. The business of banking has become more global, assisted by technology and deregulation.

People have become more geographically mobile and higher education has developed more cross-border links. The net effect is a huge increase in both demand and supply of international skills.

What does that mean for both individuals and employers? Michael Moran, managing director of outplacement firm Penna Meridian, says: 'I would argue that if a graduate or MBA said he only wanted to work in London, it would impair his career. By 35, you should have worked in at least one other culture.'

Not everyone agrees. One London-based HR director at a European investment bank says that London has become so international you do not necessarily need to travel to get international exposure.

He says: 'The percentage of people who will spend time abroad in their careers hasn't increased much. You don't need to be physically abroad to have exposure to international markets or clients. Most investment banks don't have vast numbers of offices in many locations. Most graduates who are players need to spend time in New York or London.'

Certainly London is probably the single most international location, even ahead of New York. Nowhere is this clearer than in graduate recruitment. Rebecca Neale, a graduate recruitment manager at Morgan Stanley, says applications for graduate training places in investment banking in London are split about 50/50 between UK and non-UK, mostly from European universities.

'For mid- and back-office functions, such as IT and operations, about 25% of applicants are non-UK. MBA recruitment is even more international a majority of hires are non-UK nationals.

Other banks report similar figures or even higher proportions of non-UK graduates. At JP Morgan, for example, up to 70% of graduate trainees recruited in London are from European universities.

The advent of online applications for graduate recruitment has allowed banks to cast the net wider and brought down the cost of hiring from European universities.

Recent changes in immigration rules have also made it easier for banks to hire graduates from outside the European Union. 'We can now apply for work permits for undergraduates, so the pool has opened up,' says Neale.

Despite the internationalisation of workforces, however, banks do still find it difficult to recruit people in certain markets. It remains notoriously tough to attract people to Frankfurt, for example.

Kathryn Ward has recently moved to the city to set up an office for headhunter Alexander Mann Global Markets. She says that around a quarter of equity sales staffs and a third of commercial bankers in Frankfurt are expatriates, though the absolute numbers are still tiny compared with London.

'From a career point of view, Frankfurt is never going to be the centre of the universe, unless you're specifically interested in German corporates. That's why it's hard to get people to come here,' she says. On top of that, although the quality of life in Frankfurt is exceptionally high, it is perceived to be a boring place. Pay rates are also much lower than in London, except for a few very senior international hires.

One HR director says : 'We can't get anyone to go to Frankfurt. Paris is a different story. There are lots of people who would love to spend time there - but there isn't the need.

'Overall, I think we've probably reached some level of equilibrium in international recruitment. If there were a completely flexible labour market, there would probably be more. But labour markets aren't completely flexible and never will be.'