Questioning the hypothesis that rampant poaching is about to break out in the City of London

Any moment now it will happen. You will be sitting at your desk, trying to ignore the putrefaction in the eurozone and someone will call you up and offer you a far better job for far more money at a far nicer employer which is desperate to hire you.

Really?

Astbury Marsden thinks so.

In a press release yesterday, it predicted that aggressive poaching is about to return to the City. The rationale for this is that no one wants to move. Because no one wants to move, they must be prised away.

There is some truth in this.

This year, staff turnover at most large banks has been minimal. In some areas of Citigroup, for example, it's rumoured to have been as low as 5%; in a normal year it would be more like 15%. Low staff turnover, even among people who received zero bonuses is one reason why banks are now feeling overweight.

However, in the front office the corollary of low staff turnover isn't 'aggressive poaching': it is redundancies. If staff on high base salaries won't leave voluntarily, they will be made to leave compulsorily.

The FSA's anti-poaching agenda

Aggressive poaching in front office roles has been further constrained by the FSA, which has just issued new guidance clarifying that guaranteed bonuses offered to new hires earning more than 500k mustn't be more than that person could reasonably expect to earn in a previous position and that any deferred stock that's bought out must adhere to the same vesting schedule.

Sam Whitaker, a counsel in Shearman & Sterling's executive compensation and employee benefits practice, says these rules apply to all firms (even third and fourth tier firms which might fancy offering giant quick-vesting guarantees to attract people).

"If your deferred award with an old employer was 70% shares and 30% cash, the new employer has to replicate that when it buys out your deferrals," he says. "This is the case, even if existing staff at the new employer have a more favourable cash equity split."

Such prohibitions make it difficult for 'aggressive poaching' in the traditional sense of the word to proliferate.

Prolific poaching in the back office?

The FSA's rules do not apply, however, to individuals earning less than 500k and receiving less than one third of their total compensation in cash.

It's conceivable, therefore, that there could be aggressive poaching for middle and back office and mid-level to junior roles in the last five months of the year.

Given what's currently happening in the markets, this looks unlikely, however.

"There's a lot of caution and concern out there," says the head of one search boutique. "Right now, it's all about cost control."