US banks start hiring again

The banking sector workforce has grown by 4.3% in the past 13 months after reaching a five-year low in March 2003 of 757,800. The monthly increase for June is the largest since June 2000, when a record 12,600 jobs were added to the total, according to the SIA, the advisory body to the industry.

Staffing levels typically lag the performance of the market by six months. After a strong start to the year, the majority of large European and US banks reported falling profits in the second quarter. If markets remain mixed, the recovery in hiring could stall US Labor Department statistics put the number of jobs in the industry at 780,000. Employment peaked in March 2001, with 840,900 positions at securities firms.

Many investment banks and securities houses have increased their headcount over the past six months. Barclays Capital added 1,100 to its staff in the first half as part of its three-year plan to boost numbers by 3,000. JP Morgan Chase added 400 jobs in the first quarter at a cost of $100m (€82m).

UBS has added to its workforce this year. Pay and bonuses at Credit Suisse First Boston are running at their highest levels as a proportion of revenues since Allen Wheat was ousted as chief executive three years ago. HSBC under Sir John Bond recruited more than 700 people in this year's first half as part of its restructuring. Money broker Cantor Fitzgerald is planning to add up to 200 jobs as it moves to new offices in midtown Manhattan. Merrill Lynch increased headcount by 1,100 in the second quarter.

Staffing levels at Morgan Stanley and Goldman Sachs have remained steady, although both banks were less aggressive than rivals in cutting back during the downturn.

According to the SIA, workers in greatest demand include compliance officers, credit derivatives specialists and analysts, administrative, technology, operations and accounting staff.

Headcount for securities firms based in New York also increased in June, but at a slower pace than the national figure. According to preliminary figures, New York state added 1,600 securities industry positions, or 0.9%, in the four weeks, bringing the state's total workforce to 177,000.

Although New York state accounts for 22.4% of the security industry's workforce nationwide, the number of net new securities jobs created in the state since the 1987 stock market crash, to June 2004, is less than 1% of the number created in the other 49 states.

The upturn is not limited to the US. About 35,000 jobs are expected to be created in the City of London by 2008. According to the Centre for Economics and Business Research, employment in the City will rise by 8,000 this year, 7,000 in 2005 and increase by a further 20,000 between 2006 and 2008. The think tank based its figures on optimism about the world economy and the positive effect of emerging markets, such as China.

The continuing inflow of investment into areas such as hedge funds and private equity has also led to a burgeoning job market for support industries and administrative services for them.