U.S. investment banks have posted positive earnings for the past two quarters, and it's the Wall Street operations of these firms that have stood out as the top performers. Has this improved sentiment altered their negative attitude toward hiring?
The rather obvious winners in Q3 were investment banks' fixed income currencies and commodities (FICC) divisions, with rates and credit sales and trading doing particularly well. But far from signalling a revival in recruitment, most bank CEOs heralded how they managed to produce stellar results with fewer people in these divisions.
The fourth quarter is usually a time for trimming rather than recruitment, but is anyone hiring anywhere on Wall Street right now? Yes, say recruiters, but not necessarily on the sell-side.
“This time of the year hiring is typically pretty slow, but it is picking up – it’s more robust than it has been,” said Mike Karp, the CEO of Options Group, a recruiting firm. “We’re seeing a little bit of activity on the buy side, with demand for quantitative skill sets and backgrounds – quants, high-frequency trading candidates and data-scientists.”
In addition to quantitative hedge funds and proprietary trading firms, Karp said he’s seeing quite a bit of hiring on the long-only side of the asset management business.
On the sell side, many hiring managers are waiting to see how the fourth quarter plays out before making any concerted hiring efforts.
That said, Karp is seeing some hiring activity with banks bringing on candidates with experience in rates, electronic trading, sales and traders who are proven 'alpha-generators'. For example, former bankers and broker-dealer professionals who have gone to work in hedge funds but want to return to the sell side.
In addition, banks are seeking candidates with equity derivatives experience, especially quantitative model-builders; prime brokerage professionals, especially sales; programmers who have built trading algorithms; and data-science people, he says.
“While not stellar across the board, fixed income and equities trading and sales did better than many expected, so for most banks the third quarter was pretty decent,” Karp said. “The amount of hiring between now and the end of the year depends on the election, the outlook for 2017 and fourth-quarter results."
Usually in the December or January time-frame, some of the banks will pull back on hiring, assess their desks, trim the bottom performers and look to upgrade certain key areas.
“I see continued activity in the turnaround and restructuring space, both within the consulting firms as well as the investment banks,” said Mike Brothers, a manager in the investment banking practice at Michael Page. “I don’t see any indicators pointing to a noticeable increase in hiring before this year is over. The rumblings are that some of the firms that didn’t do much hiring this year are gearing up for big 2017 recruitment efforts.”
Robert Guglielmo, the director of financial staffing at The Forum Group, said that financial services had a tough first and second quarter, but it seems like things are getting better and Wall Street firms are filling more jobs. In particular, compliance and regulatory positions are in demand right now.
“One the auditing side, there is always a need for good auditors to work for CPA firms, since there is turnover due to employees moving to the corporate side of accounting,” Guglielmo said.
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