- The job market for finance professionals has shifted across specializations, recruiters and career coaches said in New York in late November. And 2020 will be a tough year for job seekers.
- Still, bright spots for hiring include private-credit and private-equity firms; registered investment advisers and family offices; and middle-market boutique investment banks.
- “It’s been a wonky year,” Roy Cohen, a career coach focused on mid- to senior-level executives in finance and other industries, said. “My expectation is that next year will be equally challenging.”
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For the dozens of job seekers gathered in the 10th floor of a building near Times Square, a text message from a friend that one panelist read aloud didn’t exactly inspire confidence.
Peter Tannenbaum, the founder of the New York-based executive-search firm Ramax Search, pulled out his cellphone to share the message he’d received earlier from a friend he described as typically “cynical.”
“Even if you get jobs, it will be pointless, and you’ll be wondering why you bothered,” he read. “You’ll be mad at yourself for listening to the lies that your parents and teachers told you that if you work hard and get good grades, you’ll live happily ever after. Thank you. Goodnight.”
That drew some laughs from the crowd, as well as from the other recruiters and career coaches sitting on the panel with Tannenbaum.
“It’s been a wonky year,” Roy Cohen, a veteran career coach focused on mid- to senior-level executives in finance and other industries, said. “My expectation is that next year will be equally challenging.”
Alexis DuFresne, a director at the Whitney Group, an executive-search firm, agreed. The yearslong trend of consolidation in asset management and investment banking continued, while sell-side equity businesses got “decimated.”
Tannenbaum, Cohen, DuFresne, and other financial-services recruiters and career experts laid out which areas are seeing a ton of hiring — private equity and family offices are among them — even in the tough environment at a CFA Society of New York event in late November.
The speakers also offered advice on combating age discrimination, an overview on compensation, and working with recruiters like themselves.
Conditions across the financial-services job market have not reflected the US stock market‘s record levels and decadelong bull run, Cohen said.
“Banks are in the business of firing people,” he said.
Executives and analysts have cited macroeconomic conditions, like low interest rates, eating into profit margins and global trade uncertainty as culprits behind shrinking workforces across firms.
Head count across investment banking, equities trading, and fixed income, commodities, and currencies (FICC) trading continued falling in the first half of this year, while revenue for those businesses slumped to a 13-year low, according to the data provider Coalition.
There were 50,400 front-office banking jobs midyear, according to a September report from Coalition. That’s down from 56,700 at the same point in 2014, with head count shrinking each year along the way.
Still, certain opportunities have cropped up. The recruiters on Tuesday highlighted private credit and equity; registered investment advisers and family offices; technology and healthcare banking; and middle-market boutique investment banks as bright spots.
“Middle-market firms are able to attract talent from the bulge-bracket banks like never before,” DuFresne said. “It was very rare that years ago you would see somebody, a headliner, leaving a big bank like a Barclays or a Citi to go to a Cowen or a Stifel. Now those firms are growing by acquiring like firms or smaller firms.”
Beyond those spaces, pickings are slim, speakers said. New hedge-fund launches are at the lowest point in a decade, as the biggest players continue to squeeze out tinier competitors. Technology improvements at banks, they said, have eliminated or reduced many back-office jobs at banks, and funds of funds are shrinking every day.
Business Insider first reported in September that Barclays had raised the bar for hiring outsiders and was leaving vacant roles unfilled — resulting in what insiders told us amounted to an informal hiring freeze for investment banking, FICC trading, and certain back-office roles.
“You really need a sense of humor, especially in this marketplace, because it’s going to be challenging,” Cohen, who wrote a book about surviving on Wall Street, said.
Lauren Callaghan, a recruiter at the global leadership search and advisory firm Spencer Stuart, said fundraisers and marketers in the alternative investments space were in high demand as more firms look to roll out new products.
“A lot of the inbound inquiries that we’re receiving is, ‘How do I upgrade my capital-raising team?'” Callaghan, who focuses on recruitment in the alternative asset-management space, said. “People want really technical sales people who can have a much more consultative conversation with [limited partners].”
Eat what you kill
You can still get paid in finance, but you aren’t guaranteed the same paydays and bonuses the industry enjoyed decades ago.
Compensation structures have taken on an “eat-what-you-kill” structure, recruiters said, even in noninvestment roles. Fundraising and investor-relations personnel, for instance, are being paid on “new assets coming in and not retaining assets,” DuFresne said.
At new hedge funds, Tannenbaum said “every person they want to hire is on a dollar and a promise.”
Overall, compensation is expected to go down this year industrywide, according to DuFresne, “even for the performers.”
“Everyone is going to be disappointed, no matter what,” Tannenbaum said.
The bar for productivity has risen across firms. An executive at the US wealth-management giant Morgan Stanley laid out in an internal memo describing its 2020 compensation plan, reviewed by Business Insider this week, that some of the firm’s force of 15,000-plus financial advisers would have to rake in more revenue to keep their same payouts.
Delete your Hotmail account
The recruiters also touched on an issue that has also rankled many finance job hunters: “juniorization,” or the hiring of cheaper talent over a more qualified candidate.
The reality is this happens all the time, the recruiters said, but there are ways that candidates can still distinguish themselves.
Laurie Thompson, the founder of Willow Tree Advisors and a former longtime financial-services recruiter at the industry giant Heidrick & Struggles, told those gathered to lose the Hotmail email accounts — and play up whether they do 5k runs on the weekend.
“It shows people you have a lot of energy,” she said.
Callaghan said candidates needed to be agile and relevant, and suggested bringing an iPad to interviews and meetings.
Still, the changes in which jobs are available in finance now — and which firms are willing to pay — can make the job market confusing for candidates who have been at one firm for years, or even decades. Flexibility, recruiters said, is a key trait.
“You kind of have to open your horizons a bit,” Tannenbaum said.