Emerging markets jobs safe, for now

Plummeting markets, rapid expansion and rumours of hefty pay packages are not entirely unfamiliar. Could it be emerging markets jobs are set to go the same way as 1998?

No, say recruiters focused on the area. Although leading emerging markets indexes have dropped more than 10% since May 1 this year, hiring is apparently continuing unabated.

"Most of the banks say their expansion, whether in Central and Middle Eastern Europe, or the Middle East, is going ahead," says Mark Swan, an emerging markets specialist at search firm Principal Search. "The Saudi stock market, for example, has lost $400bn this year, but there is still enormous interest in expanding there."

Rupert Fordham, chairman of search firm Morgan Hunt, says the recent emerging markets rout is less ferocious than 1997 and 1998, when banks pulled out of Russia and heads rolled in the wake of plummeting stock markets and the Russian government's debt default: "There was much more of a bubble in 1998. The Russian stock market fell from 600 to 50."

Until markets fell two weeks ago, banks such as Goldman Sachs, Citigroup and Morgan Stanley were hiring vigorously in areas such as Russian equities. Japanese bank Nomura has also built a new emerging markets equities team this year. In corporate finance, Uri Cohen, co-head of recruitment firm Portman Aptus, says demand has been particularly strong for analysts and associates to work on deals in the Middle East, Turkey and Russia.

However, Fordham says banks have been less gung ho about building up this time than previously: "There's been a lot more caution about hiring large numbers of staff in Russia than there was in 1998. Then, there were a lot more banks, which got a lot more excited and hired a lot more people."

Middle East heat

If anywhere is currently susceptible to a rout, Fordham says it is the Middle East, which has seen a massive influx of banks, although economies in the region remain relatively undeveloped.

This is hotly contested by Metin Mitchell, managing director for the Middle East at Korn/Ferry International. "For there to be a slowdown and financial services redundancies, the price of oil will have to crash," he says. "At the moment there is so much cash in the system, it doesn't look like a slowdown at all."

Mitchell forecasts hiring will remain hot in Dubai, and expansion will spread to other parts of the region, including Bahrain and Saudi Arabia. As the Middle Eastern market develops, he says banks' staffing needs will switch from relationship specialists to technical specialists: "Derivatives roles will become much more prevalent."

So which jobs are likely to suffer from emerging markets' woes? Fordham also points his finger at emerging market hedge funds, which he says have been hiring vigorously and for huge amounts of money. Earlier this month, Chris Manfield, a consultant at search firm Whitney Group told eFinancialCareers that hedge funds were paying as much as $4m for emerging markets pros.

"It's still too early to say, but I think some hedge funds have been hit hard by recent events," says Fordham. "If so, their appetite for paying large amounts of money for moderate people will clearly diminish."