2006 is likely to see financial services recruiters push further along the path towards internationalism.
Several banking specialists plan to open new overseas operations next year. For example, New York-based financial services recruiter Options Group plans a new office in Singapore, and is eyeing future expansion in Milan, Frankfurt and Dubai. Wood Hamill, the U.K. search and selection group owned by Imprint Plc, plans three new overseas offices, two in the U.S. and one in Dubai.
Overseas aspirations come after a period between 1999 and 2004 in which recruiters such as Armstrong International, Whitehead Mann and Sheffield Haworth closed international offices and retreated back to their U.K. base. But recent excursions overseas have met with greater success.
London-based Sheffield Haworth opened a New York office in July 2004. Tim Sheffield, chief executive, said the firm now employs eight people in the U.S. and is doing well there, despite the risks involved. "The U.S. market is very fragmented, extremely competitive and mature. It's not for the faint-hearted."
Is Bigger Better?
Strong financial services recruitment is steeling once parochial recruiters to dip their toes in international waters. So are changing client demands. Kim Yates, a director at Principal Search, another London-based firm which ventured to open a New York office last summer, says European clients were increasingly asking them to find U.S. candidates to fill U.S. roles: "40% of our placements were outside the U.K."
European banks such as BNP Paribas and HSBC which have hired in quantity in the U.S. have made it easier for the continents' search firms to gain a foothold. So has the tendency to allocate global mandates. David Korn, managing partner for Europe at Options Group, says: "If we're speaking to a global head, we need to be global in our reach. We need to be able to service him across all regions and all products."
Brian Hamill, chief executive officer of Imprint Plc. says an international dimension is becoming mandatory: "We just completed a tender document which took us four months to put together. The bank wanted 10m ($17m) professional indemnity cover and capability across Europe and Asia. Small boutiques would struggle to provide either."
Boutiques Fight Back
Where does this leave the search boutique operating from a single office? Opinions are mixed. Hamill says they won't disappear: "Boutique firms can always make money if they focus on a niche market." But he says they are likely to be increasingly squeezed by international operators who do have a network of overseas offices.
Boutiques deny the need for a local presence in order to operate internationally. Shaun Springer, chief executive officer of the fixed income-focused search specialist Napier Scott, says the firm placed candidates in New York, Hong Kong, Dubai, Milan and Frankfurt out of London last year, and that operating from a single office has its advantages.
He says: "You make a very basic decision - do you try to become all things to all men, and expand with offices everywhere and the associated hassle? Or do you focus on one market and do what you can from a single base? We have no plans to go global."