Equities headhunters point to a new trend: culling expensive senior staff and promoting juniors, who then end up having an excessive amount of work to do.
Search firm Sheffield Haworth issued a, 'Viewpoint,' document on the cash equities industry last week. Here, it said that: "Equity salesmen are forced to cover more accounts and analysts to research more stocks as pressure on businesses to 'sweat the assets' starts to bite."
Sheffield Haworth also observed that: "Junior employees, or those from other areas within the organisation, have been used to infill or maintain continuity across cash distribution."
In practice, one equities headhunter says this means experienced equity sales people are being let go and juniors are being passed their accounts. Clients are said to be displeased as a result.
"We speak to mid-market and hedge fund clients and they're not happy about being serviced by a junior guy who lacks the contextual understanding of this market," says the headhunter. "They don't want to be broked ideas by a junior who lacks real depth of knowledge."
In equity research, headhunters point to smaller teams which are expected to cover the same number of stocks as their larger ancestors. UBS, for example, is understood to have made "dozens" of cuts from its highly ranked equity research business, including cutting its insurance team from around 7 people to around 4.
Equities headhunters are optimistic that there will be more hiring next year, driven mostly by upgrading as various firms endeavour to pinch top staff from UBS. What they really want, however, is a cash-rich new entrant. "We had BarCap and then RBC and then Berenberg," says one. "We need someone else coming in and building a business like they did. At the moment, it's all dead."