Is bank hiring emerging from the deep freeze?
It's Q4 and after a slow summer and a tempestuous spring, some financial services recruiters are daring to suggest that recruitment in investment banks might be making a comeback. Not just for back and middle office roles where hiring is steady, but for jobs like M&A where recruitment has been more moribund until now.
"We're busier than we were before," says Andy Pringle at European banking recruiter Circle Square. "I don't know why, but we're seeing small and mid-tier boutiques looking for origination people, and I'm calling candidates who've been out of the market for a while who say they've suddenly got jobs."
The 'recovery' is only anecdotal, but it's echoed by Barney Mundell, a London M&A recruiter who claims that he too is detecting an unseasonable spring in the step of the banking recruitment market. "We're busier than we have been," he says. "It was a quiet summer, but now there's an attitude of let's get on with it. Things that might have been held until next year are getting the button pressed now."
The possible thaw comes amidst mixed signals from banks themselves. Jefferies, for example, is busy hiring managing directors and is interested in hearing from people let go from other banks while simultaneously pruning underperformers. Barclays is doing much the same. Citi's cuts have barely begun. Deutsche Bank has been hiring heavily all year, but is simultaneously talking about its rising costs and the need to rein them in.
This week's cancellation of the €241.4m Planisware software IPO in Europe is not a promising sign. But banking recruiters and jobseekers looking for good news can seek solace in the chart below. Produced by Benjamin Goy, head of European financials research at Deutsche Bank, it suggests that the thing to watch is debt capital markets (DCM) revenues. When DCM revenues increase, M&A revenues typically increase two months later. Global DCM deals by volume were higher in September '23 than September '22 according to Dealogic, so optimists might expect an M&A uptick in time for Christmas and hiring to follow.
Source: Deutsche Bank
Not everyone is so sure, though. Paul Webster, managing partner at Page Executive in New York says: “We have not seen a substantial rebound in recent months however we do not appear to have had a significant deterioration from earlier in the year”
Another US investment banking headhunter tells us, "rebound is a strong word," in the context of hiring. He says that it's not so much that hiring is getting better as that after a long period of ever-worsening recruitment since May '23, things are no longer getting worse. "It's more the end of the beginning than the beginning of the end," he ponders, adding that to the extent that banks are making headcount plans now, it's more about cutting heads ahead of next year than adding before 2023 comes to a close.
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