Pulling back: the great hiring hiatus of 2011
There will be lots of hiring this year. It won't be happening in the front office.
While areas like risk, financial control and compliance are likely to retain their perennial popularity, recruiters claim banks are revising their plans for hiring in sales and trading and IBD.
UBS is a case in point.
The Swiss bank has hired several senior staff so far in 2011, but they've all been out of the market. Headhunters claim the men in question were secured last year, but obliged to delay joining until 2011 in order to access stock payments from their previous employers.
In reality, UBS's hiring plans are allegedly in a state of suspended animation. "All hiring at UBS is on hold pending approval of a new business plan," alleges one headhunter. "They've overspent on too many guarantees that haven't delivered and
have put everything on hold while they review the situation."
This has not been confirmed by UBS.
Morgan Stanley and Bank of America also indicated a certain reticence to hire in their fourth quarter conference calls.
James Gorman said they, "pulled the curtain" on hiring last August and now want to, "see some of the progress from those hires."
Brian Moynihan said they plan to keep overall investment banking headcount stable and to shift the balance of staff between regions rather than make any net additions.
Subsidising expansion in Asia
Most of this year's hiring will be in Asia. The problem is that recruiting there has become more expensive. Last year, UBS complained of Asian pay inflation and Goldman said its expansion in China was being "held back" by the difficulty of finding adequate talent.
With the emphasis for 2011 on cost control, increased costs in Asia will need to be nullified elsewhere.
Europe is likely to be at the forefront of any nullification. Revenues on the continent were weak last year and uncertainty remains over the Eurozone sovereign debt situation.
"Most people are pulling back," says an M&A headhunter in London. "The brakes are being put on strategic hires. Any recruitment this year will probably be reactive, purely in response to people leaving after bonuses are paid."
