Banks still hiring in key sectors - eFinancialCareers survey
Banks plan to axe more staff in equities and corporate finance in the next three months, but intend to raise headcount in fixed income, fund management, private equity and other sectors, the latest hiring survey by eFinancialCareers.com shows.
The picture of hiring plans in London, drawn from 109 responses from banks in 7 sectors, suggests the job market may not be as weak as widely believed.
Banks intend to raise headcount in most of the sectors surveyed. In fixed income, 50% of respondents expect to take on staff, though the figure is down from 63% last time.
In fund management, 10 of the 22 responding firms plan to raise employee numbers - a big increase on the last survey three months ago. Firms also intend to beef up in private equity, the poll shows.
Private banking is another growth area. About 40% of firms polled plan to increase staffing in the third quarter this year, twice as many as planned to in the second quarter. Just 5% expect to cut headcount.
Custody also shows a slight increase. But in two sectors - corporate finance and equities - headcount expectations are sharply lower.
Not a single firm plans to raise corporate finance headcount, while 27% plan to cut. Weighted for size of department the results are even gloomier at 45%, as the large ones are more likely to downsize.
A similar picture emerges in equities. Weighted figures show nearly half intend to cut staff, far more than in the second quarter.
An Employment Index devised by eFinancialCareers from the surveys fell from 17.1 for the second quarter to 11.4 for the third. The decrease reflects a weaker overall appetite for hiring in all sectors put together.
Headhunters confirmed that the job market varies radically from sector to sector. David Reynolds, at Sheffield Haworth, said many banks are holding fixed income staff costs steady, sometimes by firing a senior person when they take on a few junior ones.
He said credit derivatives was a particularly healthy market. Shaun Springer, at Napier Scott, said banks were taking on staff in structured credit sales and credit structuring, and vanilla fixed income sales to corporates were also a hot spot.
In fund management, Karin Barnick at Whitehead Mann said: "People are being hired in business development/asset gathering and client relationship management roles. Global sector analysts are also in demand."
She said asset management firms were also looking for strong leaders across their businesses. But overall hiring demand in fund management remained much weaker than a year ago.
Headhunters said the private equity job market was still looking weak. But James Hickman, a partner at Russell Reynolds, said there was demand in that sector for skilled operating partners to help strengthen the performance of portfolio companies.
In private banking Adam Green, a partner at TMP Worldwide, said some large firms in particular were likely to be actively hiring. Expertise in hedge funds and property was in notable demand.
Other headhunters said private banking jobs had been shed recently at Merrill Lynch and Citibank and that others were likely to go at Barclays.
Barnaby Parker of Project Partners said large global custodians were taking on custody staff to assess which operating models they needed to cope with the increase in outsourcing. But demand across the sector was generally weak.
Despite the gloom in corporate finance, Andrew Lowenthal, head of global financial services at Egon Zehnder, said: "I don't think there'll be sudden large job losses. It's more a case of salame slicing, so that they don't cut too much."
He added that across all sectors, many banks still each employed hundreds of managing directors accustomed to earning between 2 and 5 million dollars a year. Their expectations would have to change.
Springer at Napier Scott said that in equities: "The people getting the sack today are rainmakers - originators and transactors - not just mediocre people. The banks believe there might not be a recovery next year or even in 2004."
