Banks are hiring associates again but the pool of unemployed bankers is deep
Whisper it quietly, but it seems that some banks may be tentatively hiring junior bankers again. After junior bankers themselves reported a flurry of calls from recruiters, recruiters confirm that they're making those calls. It's summer, but things also seem to be heating up.
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Recruiters say the tepidity is most intense at associate level, where banks are looking for relatively inexpensive and yet capable talent to execute deals. "We're a lot busier in the associate space," says Logan Naidu, founder and CEO of Kernel Group, which includes recruitment firm Dartmouth Partners. After rightsizing teams last year, Naidu says banks now have a shortage of execution talent.
Lazo Cetnik at London recruitment firm Pretrega Partners agrees. Associate hiring is busiest along with VP hiring now, he says. Director hiring is not busy, however: "Directors are an expensive resource in a tough market," he observes.
Banks sounded an optimistically cautious note about dealmaking after a comparatively strong second quarter. David Solomon at Goldman Sachs declared that we're in the "early innings" of a "capital markets and M&A recovery." Ted Pick at Morgan Stanley said he's "convicted" that we're "in the early stages of a multiyear investment bank led cycle," and that normalized M&A activity will resume in the next "quarters and years."
It helps that financial sponsors are still sitting on a mountain of dry powder, said Pick: "The game will have to go on."
It also helps that banks appear to have been parsimonious with new analyst classes this year. As deals come back and pitching accelerates, more juniors are needed, but the graduate talent pipeline is comparatively empty. A few banks have begun advertising roles externally - JPMorgan and Morgan Stanley are both looking for associates, albeit not in London. Bank of America is looking for a VP and associate in London investment banking and for a healthcare associate in New York.
Hiring is expected to pick up more vigorously after the US election, when macroeconomic uncertainty should - hopefully - wane.
When it does, some of the hundreds of junior bankers who were let go last year might finally be re-employed. Cetnik says there are still "loads" of people out of the market and that each job advertised is inundated with applications, some of which come from people who haven't had a job since early 2023.
For the moment, banks can afford to be incredibly choosy. One recruiter says most managing directors are focused on upgrading the junior talent they added during the hiring frenzy of 2022, when they feel that "compromise" hires were made.
Unfortunately, this means that if you're out of the market, you probably still can't back in, or at least not without a pay cut or a demotion.
If you are one of the laid off bankers locked out of a job, recruiters say you need to focus on your narrative: explain that others were cut at the same time as you, spend time upskilling and try offering advice to start-ups. In many cases, junior banker layoffs weren't even the fault of the analyst or associate, says Cetnik: it's usually down to the managing director, who failed to originate sufficient deals to pay for the team.
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