Signs of a recovery? London's financial recruiters are expanding

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It’s been a tough couple of years for recruiters focusing on financial services in London – many specialists have diversified away from the industry in an attempt to bolster revenues, others have struggled as banks have fired, frozen hiring or moved towards recruiting more directly.

And yet, in the past three months, there’s been a steady shift towards optimism, and recruiters have started expanding again. Astbury Marsden intends to double its sales headcount – amounting to around 35 people in London – although this will not be entirely focused on finance; Michael Page says it’s “expanding its coverage” in the financial sector; Selby Jennings told us that headcount in its London office has “increased significantly this year” and Robert Walters has bolstered its financial services desk over the past six months, according to Peter Milne, its managing director of banking and financial services recruitment.

London’s financial services job market is still in the relative doldrums – there were just 2,500 new jobs in June, according to Astbury Marsden, 3% up on the previous month but still 15% down on the same period last year despite hiring sentiment turning “more positive during the past few months”. The number of FCA-authorised staff (namely, those working in the front office) has fallen to a nine-year low of 149,626, according to the monthly update from M&A boutique IMAS.

To some extent, recruiters’ expansion can be pinned on a fairly obvious and not very exciting reason – regulation. Compliance, risk, change, audit, as well as regulatory-focused technology roles, were all highlighted as hot spots by the recruiters we spoke to, with banks being forced to hire specialists rather than expanding because of increased business volumes.

“A lot of permanent staff in risk and compliance have been shifted across from business-as-usual roles on to specialist regulatory projects, which in turn is driving the need for replacement hiring,” said Robert Walters’ Milne.

Despite a good first half for the larger investment banks, no one is suggesting that hiring in this sector is back with a bang. Job cuts may have slowed in the City, but further redundancies are expected in areas like debt capital markets and sales and trading. Areas like high yield, rates and equities revenues have started provided some rare bright spots though and London recruiters are seeing more action in the front office.

“Front office demand is stronger now,” said David Leithead, managing director of Michael Page Banking and Financial Services. “There’s not a huge amount of visibility of what’s going to be happening in London in 12 months’ time, but it’s been very encouraging to see a pick up in front office recruitment: that bodes well for the future.”

Similarly, Kieran Behan, managing director of Selby Jennings, said that there has been “consistent demand” for front office roles in the past few months, even if the pattern of recruitment has changed. Previously, recruiters would have been able to ride the machinations of the investment banking job market, which traditionally swings between hire-and-fire.

Now, he says, “developing a specific understanding of client specific hiring needs is more important than viewing the market as a whole”. In other words, while front office hiring may be picking up, it’s still a much tougher market for recruiters.

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