There used to be an unpleasant reality for financial services job seekers that you needed a job in order to get a job. That was because banks preferred to recruit from among the currently employed rather than accept someone who had been laid off. But that was when banks had money to burn on upfront bonuses and attractive compensation packages.
Now they're singing a different tune. Comps are down, and according to a new survey published by Financial News, some banks are starting to consider unemployed financial pros when a position opens up.
The survey polled 150 financial services headhunters in London. It found that recruiters are more willing to hire those without jobs primarily because of the huge number of layoffs in the past year. Headhunters were quoted as saying there is demand for talent in debt capital markets, but not in equity capital markets or in mergers and acquisitions.
They also said there are four reasons for the shift:
- There are some high quality people out of the market.
- Banks aren't allowed to pay guarantees except in exceptional circumstances.
- Unemployed people don't demand guarantees.
- Top performers currently in jobs are very hard to move.
Harder to find a job
Unfortunately, this comes as nearly every bank on Wall Street is about to slash more jobs in its capital markets and investment banking sectors, while there will be selective hiring in wealth management and private banking, compliance, quantitative analytics and research. Here's a snap shot of each bank following their earnings releases. The six largest U.S. banks have eliminated 18,000 jobs in the last year, according to the Wall Street Journal.
Morgan Stanley released its earnings today, showing a 50 percent drop off in its fixed income sales and trading over last year while profits in its institutional securities division fell 64 percent. Morgan Stanley recently made some job cuts in its sales and trading and more are expected.
Deutsche Bank says it's eliminating 1,000 investment banking jobs, most of them in London.
Credit Suisse, the second-biggest Swiss bank, filed documents with the New York department of Labor that it plans to eliminate 138 jobs in Manhattan beginning in August and running through to October 14th. This follows a similar filing that showed the bank would cut 126 jobs between May and August 6th of this year, bringing the year's total of New York City layoffs to 264.
Goldman Sachs said it would save money by hiring younger, less expensive investment bankers.
Bank of America is in the process of eliminating 30,000 employees. It has already shed 12,000 with 18,000 to go.