Survey: Corporate finance hires down for Q1 2005

Redundancies in corporate finance could sour the UK hiring outlook according to a survey by eFinancialCareers.com.

Of the boutique and bulge bracket banks polled, 35% said they would be cutting corporate banking staff by over 5% in the first quarter. Another 18% of respondents reported they would decrease levels by up to 5%.

Simon Hall, a partner in the financial services practice of Heidrick & Struggles, says London investment banking management teams are cautious ahead of a weak January in M&A. 'Hiring will be done on the basis of upgrading as opposed to expansion,' he says.

That caution is not misplaced as some UK business may be headed to the Continent, says Hall: 'London teams are overstaffed in some institutions, and there is an increasing focus on improving regional coverage across Europe.'

Jonathan Baines, co-chairman of the financial services practice at Whitehead Mann, says while the market will see little headcount increase at senior levels, juniors who can execute deals will still be in demand. Baines says, 'At the junior levels, both analyst and associate, there is considerable pressure to rebuild the execution resource that has been cut over the last four years and is now stretched to the limit.'

However, with margins and profits under pressure as well, banks want to make more use of employees already on board. For example, UBS restructured its European M&A department in January. Now bankers there must both originate deals and execute on them, shepherding them through to completion.

Certainly, some banks will make selective hires in corporate finance; 26% of survey respondents said they would be looking to add to staff. This is down from 56% reporting an increase in the first quarter 2004, suggesting that banks are looking to attract only strategic hires. Baines says, 'We will see continuous evidence of a steady upgrade in quality.'

The eFinancialCareers.com hiring survey covers seven sectors: corporate finance, fixed income, equities, global custody, private banking, fund management, and private equity. The results are available for download on the eFinancialCareers.com homepage.

ibrown@efinancialcareers.com