The merry-go-round of hiring activity that has characterised the financial services industry in recent years has slowed dramatically, especially in the financial epicentres of London and New York. They continue to see severe cutbacks and job losses as investment banks slash costs.
Booming markets over the past few years have triggered rising demand, particularly for junior and mid-level roles within the investment banks. This level of hiring has now slowed down, partly due to the credit crisis in the US, partly because many of these positions have now been filled.
But while Europe and the US face recession, Asia-Pacific is still viewed as an engine of growth for many institutions. And banks in the region are snapping up talented professionals on the cheap.
ôWe are seeing a lot of demand in the M&A space for investment banking in China and within specific sectors such as infrastructure and resources,ö says Chia Tek-Yew, head of Asia and co-managing partner at Whitehead Mann in Singapore. ôWe see a shift in clients from the major Wall Street banks to aspiring tier two players who see this as an opportunity to snap up talent and build up their Asia operations. In addition, banks that are building up their front office are also doing the same with their back office talent pool.ö
Overseas candidates looking to move to Asia face difficulties, though, as employers stipulate they need to have an understanding of the regional markets and fundamentals.
ôMany candidates face problems as they donÆt have specific Asian markets experience,ö says Simon Vaughn Edwards, managing director of London-based executive search firm Akamai Financial Markets. ôIn the derivatives space however, quite a few candidates are enquiring about a move to Asia, as this region has always been a leader in terms of the retail investor base. It is easier to relocate esoteric product staff because they are bringing a specific skill set. They are product- rather than client-focused, which is why the movement of senior talented structurers and traders is viable.ö
Recent hiring activity has partly been triggered by the onslaught of Lehman BrothersÆ Asian staff to the market. Both Merrill Lynch and UBS have snapped up Lehman teams in recent days, despite offers by new owner Nomura to pay Lehman investment bankers the equivalent of last yearÆs bonus, in cash, if they stay until the autumn of 2009.
Nomura acquired Lehman BrothersÆ Asia-Pacific operations two weeks ago after the 158-year old US firm filed for bankruptcy protection, to tie in with its own investment banking ambitions in the region.
ôLehmanÆs staff are not cheap thanks to Nomura,ö says a headhunter who asked not to be named. ôMost bankers on the street would be happy to have a two-year guarantee of their 2007 compensation because that's clearly not going to be happening for the majority of people in current employment. So I think the issue is availability rather than price.ö
Some of the top tier banks have now placed restrictions on Lehman candidates, by offering lower fees to recruiters and agreeing to meet only with candidates who are applying for a specific role.
Meanwhile, Merrill Lynch is reportedly required to get approval from Bank of America for all employees to be kept on the roster, including those who were originally approved post the takeover, according to sources. Merrill Lynch has declined to comment.
ôWe see less mandates from the investment banks as they consolidate and keep an eye on costs,ö says Anthony Lewis, joint founder and co-managing director of Hong Kong-based search firm ALS International.
ôHowever there is still a lot of activity on the buy-side, particularly hedge funds that invest in distressed debt and private equity firms.ö
Regulatory roles are also being filled, as firms respond to the necessity to have market risk specialists on board. This is in order to ensure traders are trading within the limits set by the company and by individual governments.
Headhunters also point to pockets of hiring in London, within commodities and the regulatory space, particularly for compliance, risk and operational roles. A number of houses, including Macquarie Bank and ICAP, are also building up their European equity businesses, say sources.
This is usually the time of year when banks start allocating budgets for 2009 and when they start to talk to head hunters.
"In a traditional year nobody is closing deals in October, so in some ways there is more hiring going on this year, because of the opportunities presented by the collapse of Lehman Brothers,ö says Harry O'Neill, managing partner of financial services at executive search firm Heidrick & Struggles.
ôTraditionally towards the end of the year very few people want to buy out bonuses for a full year, so to have a hiring freeze in October is a pretty standard condition. We would be much more worried if there were hiring freezes in January. There is a great deal of uncertainty and with so many financial institutions merging at short notice, it is very difficult to predict what next year's hiring season will look like."
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