Equity research teams are starting to resemble an hourglass: all top and bottom with not much in the middle.
The situation looks set to continue, with juniors benefiting top of banks' shopping lists for next year. Jonathan Evans, managing director of search firm Sammons Associates, says banks' research hiring requirements for 2007 are focused on people with between one year and 18 months' experience.
"There are very few teams now where you have a senior analyst, a junior a couple of years below him, and several juniors below that person," says Evans. "It tends to be one high-profile person and four or five associates."
Wall Street compensation specialist Johnson Associates draws attention to the phenomenon. The US research market has split into two tiers, according to Johnson, one comprised of visible seniors, the other of juniors (who undoubtedly do much of the work). Meanwhile, the marzipan layer of mid-ranking research professionals has all but vanished.
Cost is undoubtedly behind all the mid-level slimming. Unbundling and restrictions due to conflicts of interest mean research is an increasingly conspicuous cost. And juniors come cheap.
A rival headhunter says the lack of mid-ranking research talent is good news for researchers with between four to five years' experience, who are now in a relatively strong position. "There are some incredibly strong junior analysts who are now back-up analysts to the heads of teams - this would never have happened five years ago."
He says top performers at this level can earn up to 350k. Sadly, Sammons says this is an exaggeration: "200k is more like it."