Our Take: An Opportune Moment
Welcome to the era of opportunistic hiring.
Morgan Stanley's dramatic recruiting announcement Thursday thrusts to center stage a practice that - while mentioned from time to time by headhunters since Wall Street's job market began to weaken a year ago - has been all but overshadowed by announcements of a less cheery sort.
Even amid wave after wave of asset write-downs and job cuts, some of the hardest-hit institutions have been selectively hiring. A good part of that hiring is strategic - focused on geographic and product markets where business remains strong, like the oil and gas sector, China and private wealth management. However, look beneath the headlines and you'll see both boutique banks and bulge-brackets scooping up key people in less-buoyant sectors such as M&A, equity research - even fixed-income derivatives.
"I'm surprised at how busy we are," remarks Wall Street headhunter Jay Gaines. "I thought this crisis was going to give me the summer off. But our phone is ringing, and it's ringing from names that are viewed in the press as pressured."
Who Else Has Added Staff?
In July alone, sell-side institutions announcing multiple additions included Barclays (at least three group heads within M&A), Bank of America (nine senior equity research analysts), and Morgan Stanley itself (private wealth management for Venezuela and Mexico). Minneapolis-based U.S. Bancorp also has been hiring, says New York career coach Roy Cohen.
Attention candidates: Open that address book, and network your way to a decision-maker while the window is open. "Find a way to creatively get in front of Morgan Stanley," Cohen suggests. One of his clients who interviewed there recently got called back for a second talk before she even had time to send a thank-you note for the first one.
But be forewarned: the window is really open just a crack. Gaines says Morgan Stanley and the other banks recruiting today are "taking advantage of the unprecedented opportunity of high-quality people being movable." Opportunistic hiring, he explains, "is very specific and the standards are different than in normal times." Compared with the mass layoffs that have occurred and may continue to occur, "the hiring will be far more surgical and far more precise."
A Positive Signal
Nevertheless, Morgan Stanley is sending a positive signal, about itself and investment banking business as a whole. Chief Executive John Mack and other top executives are convinced the firm has cut enough, spokeswoman Jeanmarie McFadden told Reuters. (The bank reportedly eliminated 4,800 jobs, or 10 percent of its work force, during the past year.)
By reinvesting as much as 100 percent of the savings from those cuts toward bringing in new talent, management is looking beyond the current downturn toward the day when business picks up again across the board. "They're taking an offensive stand, rather than a circle-the-wagons defensive stand," observes Gaines.
Will Morgan Stanley's bold move turn out to be prescient - or merely premature? Since last year, Wall Street leaders, Mack among them, have been all too eager to call the bottom of this cycle. This past April Mack proclaimed the sub-prime mortgage problem in the U.S. was "in the eighth or ninth inning," and predicted the broad credit markets would bottom out before year-end. Further waves of write-downs followed. To mitigate the resulting damage to their balance sheets, both Lehman Brothers and Merrill Lynch had to issue new equity after repeatedly insisting they would not. Confidence in mortgage-market pillars Fannie Mae and Freddie Mac eroded to a point where the White House and Congress felt compelled to draw up an emergency rescue plan.
For candidates, however, forecasting the twists and turns of job markets is beside the point. Rather than getting carried away by economic forces beyond your control, build your short-term career moves around those things you can control: your network, your self-presentation, your skill-set, and most of all, the effort you're willing to put in to get where you want to go.
In short: Be opportunistic!