Fast tracking comes around again

As banks struggle to retain M&A staff, one search consultant says fast tracking is making a comeback.

"Given the current tightness of the market, banks are having to do more to retain staff and keep them happy," says Andrew Lynch, an investment banking specialist at search firm The Veni Group. "Tier two banks and those with a weakened franchise are struggling to compete with current compensation levels, and in order to attract or retain individuals are promoting people to associate and VP positions earlier."

It usually takes six and a half years to make the transition from M&A analyst to vice president. One recruiter says Dresdner Kleinwort is among the banks which will occasionally now allow people to make the move in five and a half. A spokesman for the bank said the general policy regarding promotion hasn't changed, however.

Lynch says one bulge bracket bank is now promoting third year analysts to associate positions six months earlier than usual. "They've lost staff to private equity funds and hedge funds, and fast tracking is an incentive for people to stay put," he says.

The overall effect is negligible, with third year analysts promoted at Christmas instead of June, and salaries rising from around 48,000 to 55,000, while bonuses remain static.

Bankers who are fast tracked now may find their early promotion causes confusion later on. "Fast tracked analysts may find that when they attempt a lateral move later in their career, their future employer has difficulty in justifying to their existing staff that they will be hiring someone with a year's less experience at that level," Lynch says.