Here's what's really happening to hiring, in light of current events

Middle East unrest and the Japanese earthquake and now nuclear crisis are in danger of subduing an already quiet financial services hiring market, say recruiters. Banks were already hesitant about hiring this year; that hesitancy's increased.

"In this environment, banks are being more cautious than they would have been," says Adrian Ezra, chief executive of search firm Execuzen. "People are going slower than they would have done."

"Hiring is very fragmented," says the head of another search firm. "It hasn't been a good start to the year and there's so much going on that banks aren't making decent revenues. Most of them can't afford to hire."

The big question is what happens next to recruitment Japanese banks, many of which were expected to be active in London this year. Nomura had already closed some of its commodities business before the earthquake happened. CreditSights has pointed out that Japanese banks are facing significant stock losses, but London-based headhunters working with Japanese clients say it's too early for any change to recruitment plans.

Based on what we know, here's a brief resume of the state of hiring, sector by sector. The real activity seems to be in M&A, equity research and the middle office.

FICC:

Very little going on, with very small pockets of opportunistic hiring. UBS is said to be interested in a few credit sales people, Goldman is rumoured to be looking for a few people in high yield, State Street is said to be building a rates business. Morgan Stanley has said it wants to hire in rates and FX. Lloyds is said to be hiring for FX.

Part of Nomura's commodities team is on the market. SocGen, BNP Paribas and Credit Suisse are rumoured to be sniffing around it.

Equities:

More active, particularly in research. Equity research headhunters report hiring everywhere from Citigroup to JPMorgan and Evercore. Morgan Stanley wants to expand in equity derivatives. Nomura has just brought on Benoit Savoret as joint global head of equities, which could yet result in hiring.

BarclaysCapital has just reorganised its convertibles team in anticipation of a rush of convertibles issuance, which could suggest limited hiring elsewhere. Overall, however, BarCap's equity hiring is said to be done.

M&A/IBD:

This is the most active front office area right now. BAML and Citigroup are in the market for 30 and 20 senior relationship bankers respectively and Citigroup is also said to be hiring juniors. UK M&A has started 2011 on a four year high.

Middle office:

Although technology recruitment this year is likely to be lower than last year, there's still plenty of need for technologists, business analysts and project managers to integrate trading systems and manage the regulatory requirement for central clearing of OTC derivatives.

Hiring also appears to be strongish in product control, where Ben Bonny, a manager in the financial services team at Robert Walters say the real issue is, "a lack of good candidates with strong product knowledge.

"The banks are being very particular and are prepared to wait for the right individuals to come to market," he adds.