M&A: fees up, jobs yet to follow
European M&A may be soaring, but for mid-ranking and senior bankers at least, headhunters say there's no guarantee of being able to step into a new job.
"Human capital moves in M&A have become far more sticky than they used to be," says Julian Bell, a director at search firm Sheffield Haworth. "There are no massive hiring plans anywhere in M&A this year," he adds. "Headcount growth across the industry is probably 5% year on year - good bankers who have frustrations where they are will find it difficult to make a move happen."
Banks such as HSBC are expected to reduce the pace of hiring in 2006. HSBC hired vigorously for its M&A team in the past few years, but announced last year that its expansion was largely complete. Bell says Lehman Brothers is likely to continue expanding slowly, however.
The tribulations associated with landing a new job are likely to be greatest in non-sexy sectors in which M&A activity is limited. Last year, for example, financials institutions and energy and power companies generated the highest M&A fees globally, according to Thompson Financial, the information provider. By comparison, fees languished for bankers involved in areas like industrials and retail.
"Things are pretty quiet across industrials as a whole," says Isabel Martin, head of financial services recruitment at Korn/Ferry International in London. "Metals and mining and energy are busy, but there's not much hiring going on in sectors like automotive or electronic components. If your speciality is electrical engineering companies, no one is going to pay you to do that right now."
The apparent dearth of demand for M&A bankers does not hold true at junior levels, however. Recruiters reassure us that banks are still scrabbling to fill holes in execution teams.
