Are financial institutions actively hiring, or aren't they? Official data that show little net change in financial-industry employment over the past 12 months seem to refute widespread headlines in the mainstream and financial media about a "Wall Street hiring boom." But official employment totals aren't the most reliable indicator of the market faced by an individual job seeker.
Anecdotal evidence of a hiring surge is rife. Recruiters regularly say their business is booming. On eFinancialCareers, June postings for investment banking jobs increased 75 percent compared with a year ago, and 72 percent of Wall Street professionals surveyed during May said they'd been approached at least once by headhunters since the start of 2010. Bulge-bracket institutions including JPMorgan and Goldman Sachs increased their overall headcounts last quarter. (Those are global totals, however, and both firms say they're adding heads largely outside of the U.S.)
Bouncing Along the Bottom
Labor Department payroll numbers paint a less cheery picture. Nationwide, employment in the financial activities sub-sector labeled "securities, commodity contracts and investments" has fluctuated hardly at all month by month since last July. The preliminary total for June 2010 of 797,200 (seasonally adjusted) is down 3,400 from July 2009. Since bottoming in March this year, the sector has recouped 6,700 jobs - less than 1 in 12 of the 81,400 net jobs lost since employment peaked at 871,900 in June 2008.
In New York City - a better proxy for "Wall Street" than the nationwide totals - securities industry employment this year appears to be bouncing along the bottom rather than trending upward. The industry's June headcount in New York (not seasonally adjusted) is just a few hundred jobs above where it began the year, and is below where it was in any month of 2009.
So, Which Picture Is More Realistic?
The discrepancy led some eFC users to post comments disputing one of our "hiring boom" stories. For a job-seeker, however, the statistic that matters most is the number of suitable jobs that are open now. Other inputs to payroll headcounts, such as firings, have little direct impact on one's chances of landing a new job. Likewise, comparing today's payroll numbers with those of two and three years ago is a vital exercise for economists and policy makers... much less so for job seekers.
TheStreet.com neatly explained the ambiguity in a story Tuesday. It points out:
- Wall Street hiring is selective - firms are hiring "star traders, wealth managers and top-notch executives who can get the job done."
- Individual hires of sought-after traders generate bullish headlines. So do statements by any bank that it plans to add heads in one or another division.
- At the same time they expand some departments, firms continue cutting back elsewhere. The net result: "Wall Street has yet to prove that it's hiring enough workers in key divisions to make up for those it's getting rid of in divisions whose outlook is bleak."
- And of course, where global banks do create new jobs, the bulk of them are located overseas.