2021 has been a boom year for banking jobs. Can this continue?
2020 was a tough year for financial services recruiters. In the early stages of the pandemic, recruiters were furloughed. Even in summer 2020, some recruiters were taking entire months off on the beach in the absence of any real work to do.
2021 couldn't be more different. This year has been exceptional for recruiters in the financial services industry, and for candidates looking for jobs. Some junior bankers have been hit-up by 50 recruiters a week in what's widely described as a "candidates' market." Buybacks are common. "It really is the busiest hiring market that I can recall seeing," said Anthony Keizner, partner at Odyssey Search Partners in New York in May. Many other recruiters would agree.
But as any recruiter who's been in the market for any period of time can testify, financial services hiring can be just as erratic as the financial services industry itself. If 2021 has been a boom year, what comes next?
Most of those we spoke to are confident that 2022 will be a repeat of this year. "We expect current hiring levels to continue," says David Korn, UK-based president Options Group. "There doesn't seem to be a hiring cycle or recruitment windows in banking anymore. It's a relentless battle to attract top talent and the best candidates seem to have multiple offers."
It's a similar story in New York, where Mike Karp, CEO of Options Group, predicted that hiring will be "robust" next year and that the current war for talent will continue. Counteroffers have been rampant, says Karp, noting that hiring is already stepping-up as the return to the office continues.
Many recruiters expect disappointment with the 2021 bonus round to drive hiring in early 2022. "We're looking at movement post-bonus next year," says Logan Naidu, chief executive of London-based search firm Dartmouth Partners, which focuses on investment banker hires. "This will then kick off more activity, back-fills and some possible continued growth hiring."
It's not just investment banking division (IBD) headhunters who are optimistic. Edward James, a director at London-based RCQ Associates, which hires risk professionals, says this year's 'exceptional busyness' in terms of hiring is likely to persist, also driven by candidates moving after bonuses have been paid. "Many people feel they’ve been overworked and underappreciated, and we haven’t even yet seen the full repercussions of firms encouraging staff to return to the office," says James of the risk and quant-risk space.
And yet, there are a few strands of uncertainty. One equities headhunter who focuses on the Americas market says 2021 has benefitted from the 2020 revenue boom and 2022 could go off the boil. "Last year few people got fired or hired due to pandemic, but financial institutions made a lot of money," he says. "This year, the returns not as high due to less volatility in the market. Recruitment activity is high, but because firms are playing a little catch up on firing / hiring from low activity last year."
If financial services hiring activity in 2021 has been 1.5 to two times higher than last year, he predicts that next year's recruitment is likely to be closer to pre-pandemic levels. "If markets are good, activity will be high. If markets are rocky, people will be cautious. If markets are crap, it will be very quiet on the recruitment front."
Another experienced London headhunter voices greater uncertainty. "Everyone's being too optimistic about next year," he says. "It's been very busy, but the expansion is already slowing. The panic to hire juniors is subsiding and the buy-side doesn't hire in volume. There are very few growth platforms, so as deal flow slows, so will hiring plans."
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