Boyden Executive Outlook Projects a Leaner and More Opportunistic Financial Services Sector in 2012

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Boyden, the Global Executive Search firm, issued its forecast for 2012 today saying that while some areas could see an uptick in employment this year, financial services isn't going to be one of them.

"The landscape for financial services has changed due to the credit crisis and government uncertainty,” said Jeanne Branthover, Leader of Boyden’s Global Financial Services Practice and Managing Director at Boyden New York.

“Firms are still evaluating their strategic options for 2012," adds Branthover. "Many are eliminating entire functions or departments such as M&A, investment banking and proprietary trading to clean up and deliver their balance sheets. Major institutions will look leaner in hopes of becoming more nimble and opportunistic."

Large firms are moving back to their traditional models. Overall compensation for the sector is down 25 percent to 30 percent, and deferred compensation packages will be in place for the long run. Many Wall Street firms are limiting payout and changing compensation formulas to reduce expenses.

Bright Spots

"This year, companies will continue to invest in Wealth Management, Asset Management, Risk and Compliance and Technology," said Branthover.

“Sales and marketing executives are in demand in Canada as financial services companies look to drive growth by building customer loyalty and delivering customer value in an uncertain economy,” said Janice Detta Colli, a Managing Director at Boyden Toronto. “In the last few months, there has also been a real emphasis on corporate customers compared to a more retail-based focus last year.”

Neil McKay, a Partner of Boyden UK, noted select companies are increasing market share in M&A fees but fee generation cannot make up for the difference in the fall off in sales and trading revenues.

He added that banks can’t lend to “buy” market share in the fee income business and thus there will continue to be retrenchment from Investment Banking activities in some universal banks. In line with global sector trends, seasoned senior bankers in Natural Resources and Financial Institutions remain in demand, whereas little activity is expected in the Retail and Media sectors.

“We expect intense competition for executive talent in risk, compliance, control and treasury functions in European emerging markets as financial institutions continue to strengthen and ‘upscale’ in these areas,” said Eva Kingston, a Partner of Boyden UK.

Elsewhere in the World

In Sub-Saharan Africa, executives with strong experience in Consumer Finance and Mobile Banking are being recruited at a premium, added Ms. Kingston.

In Asia, however, bank hiring has slowed down. Institutions are increasingly opting to outsource jobs for contract-based projects, according to Gina Ong, Partner of Boyden Singapore. “Companies are awarding increasingly smaller salary increments as the overall job market moves from being candidate-sparse to an employer-sparse one.”

Compared to previous quarters, activity is more constrained in China with layoffs prevalent in almost every sector. “There is little activity in the financial sector, a marked contrast from what we were seeing a year or even six months ago,” said Brian Renwick, a Boyden World Corporation Board Member and Managing Director of Boyden China. “That said, most Chinese businesses are still fairly confident that growth will continue, and many European and U.S. firms continue to invest for China’s long-term future.”

In the Middle East, foreign institutions are sharply reducing their headcount due to a lack of deals in the region and in order to focus on bigger problems in Europe, according to Magdy El Zein, Managing Director of Boyden Middle East.

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