No hiring freezes, but a chill blows through investment banks

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Richard Hoar, a director at headhunter Goodman Masson, said: “Compared to last year, there’s been a big drop in the number of mandates in the market. People are still moving, but there are more candidates and fewer jobs.”

According to the latest Morgan McKinley employment monitor, published in June, the number of available financial services positions in London fell 8% year-on-year in May, while the number of job seekers rose 36%.

Even before the UK’s historic referendum on EU membership on June 23, banks had “put the brakes on” their hiring plans, according to one investment banking head, who added that selective recruitment was likely to be the order of the day for the rest of the year.

He said: “Will there be selective, rifle-shot hiring? I’m sure there will, but no one wins any prizes for trying to squeeze a really big hire in when there’s so much uncertainty around.”

At HSBC, a near-freeze put in place earlier in 2016 remains in effect, according to people familiar with the situation, while Barclays is still making selective hires, another person said.

At Credit Suisse, growth and recruitment plans at the investment bank remain unchanged, according to Jim Amine, chief executive of investment banking and capital markets. In an interview with Spanish newspaper Expansión published on July 4, Amine said the expansion of and investment in his division was going “according to plan.

He said the bank would continue to add senior figures to its global team, with further announcements expected over the next month or two. “We are being extremely meticulous in terms of investment as we are hiring for specific needs where we see opportunities and where we see Credit Suisse having a competitive advantage.”

Across the wider investment banking sector, headhunters say roles that do require filling are far more likely to be done internally.

Tom Nalder, a partner and co-founder at executive search firm Langbourn Partners, said: “We’ve already seen a lot of push back from hiring externally – banks will try and move people around the network internally.”

Hoar at Goodman Masson added: “They [banks] have a talent pool which costs more to get rid of than to move.”

Away from the uncertainty created by Brexit, a slowdown in European deal volumes across the capital markets and M&A has also been weighing on recruitment activity by investment banking departments.

During the first half of 2016, revenues earned from M&A, loans and debt and equity capital markets work in Europe, the Middle East and Africa stood at $ 8.3 billion, according to Dealogic. This marked a 22% year‐on‐year drop, to the lowest first-half total recorded by the data provider since 2003.

The result of the referendum is unlikely to improve the situation.

A senior investment banker at one Canary Wharf-based firm said: “No one knows what the investment flows are going to look like. Event activity is down significantly and the second half of the year will be much the same, certainly from a UK perspective.”

A banker leading the equity capital markets business at one bulge-bracket investment bank told FN on June 24, the morning after the vote: “This is as bad as it gets…deals are going to get pushed back.”

Not all firms are slowing down, however. As FN reported on June 30, independent advisory houses have said Brexit may give them new hiring opportunities, including recruiting staff from big banks.

Scott Bok, chief executive of Greenhill, said Brexit would not change the company’s hiring plans, adding: “If anything, even more high quality bankers who work for the European banks, either in Europe or in the US, will be wanting a new home.”

Hoar pointed to FIG and healthcare M&A as areas in which his boutique clients were looking to hire.

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