It's a painful time to run a London banking recruitment firm. So says Tom (a pseudonym), the head of a City search boutique for the past decade or so. "Our young consultants are leaving and looking for other jobs," says Tom. "They haven't made money. They're either moving in-house and working for banks, or they're moving to work in a different industry."
Tom blames Brexit for this whole new world of deprivation. "This Brexit thing is crushing our business," he says. "Anyone who says it isn't is either smoking weed or placing people into technology jobs. Last year we had our best year ever. This year, the flow is just not there."
Tom isn't the only one complaining. Oliver Rolfe, head of Spartan International Executive Search in London says, "hiring is certainly slowing down." Another headhunter describes the environment as, "sh*t:" "No one is bullish and no one is spending money. It's all about reducing costs."
The costs associated with Brexit don't help. Bank of America today reiterated that it's spent $400m preparing for Brexit and suggested other European banks are spending similar amounts. The slow fourth quarter didn't help, particularly in sales and trading and debt capital markets. Most banks will be looking for clear signs of improvement before committing to headcount increases.
In the meantime, there are signs that London's allure is waning. In November 2018, recruitment firm Morgan McKinley said applicants for new London jobs were down 30% on the previous year. A sizable chunk of talent has disappeared.
What's a London-based banking professional to do? Russell Clarke, founding partner of London-based Figtree Search, says banks only really want to hire, "multi-dimensional and technical people in distribution and relationship management, and the very best technologists.“
To survive the coming year in a current job - let alone getting hired into a new one - Clarke says you'll need to be niche and you'll need to be tightly-priced to fit the role. "There is not enough cash swilling around to take a punt on generalist hires. Unlike the U.S., banks in Europe are refocusing on providing niche, high-end expertise; they need less headcount in the front office."
As the London market evolves, Tom says banks are taking out costs at the top and at the bottom and are clinging to people in the middle. "If you're one of a team of 12 grads who were taken on last year and you have nothing to differentiate you, watch out.
"If you're 45 and you're used to an easy life selling a big platform and printing money, watch out too," he adds. "But if you're below 35 years-old and you're a talented vice president (VP) making good money for the bank, you will be fine."
Of course, this might all change for the better after 29 March. Rolfe, for one, is cautiously optimistic: "There could be a springboard effect, which leads to a lot of hiring, or it could be that the current market situation will become the status quo."
Bank of America today suggested that the current hiatus could persist. “Dublin is our headquarters for our European bank now full stop,” said Anne Finucane, European vice chairman at Bank of America. “There isn’t a return. That bridge has been pulled up . . . From a trading perspective, likewise Paris would be the European trading arm.”
Welcome to the new normal.
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