IEPlus: Markets soar, but recruiters warn sentiment does not mean jobs
Market bulls stampeded indices higher following decisive policy measures announced in the Eurozone, and the start of the US Federal Reserve’s third round of “unlimited and open ended” quantitative easing.
The whole aim of the co-ordinated action is to stem joblessness and support efforts to create new employment, especially amongst younger workers. But recruiters in the asset management industry warn that a jobs bonanza is some way off.
In London, the most buoyant of European financial centres, recruitment agencies admit there are some surprising hires being made, but the criteria are very strict.
“Good people are being looked after,” notes Lee Higgins, an experienced headunter who runs the online portal www.jobsinassetmanagement.com and a networking group called TheBuySideClub.com.
“If you are moving you really have to have something to offer. Firms are focusing on key asset classes and their core strengths, rather than allowing speculative forays into new ventures. You need to have a track record and be able to prove you can bring in revenue.”
Across Europe the most active hiring sectors are fixed income, and emerging market debt, especially any Asia or Latin American expertise. The Middle East is also attractive but firms have struggled to get traction for business there, so add staff cautiously.
While investors are pressuring asset managers for returns, the managers are looking for experienced professionals who can deliver in areas like multi asset and high yield. “They need people who can talk knowledgeably to the client, which supposes 1) the knowledge and 2) the ability to communicate. That combination is not so easy to find,” says Higgins.
Despite all the support supposedly available, training still lags demand for skills, and the pipeline is empty because firms squeezed by the recession have not been spending on training.
Higgins says many complain of a lack of commercial awareness among graduates, even where they have the necessary technical skills. Candidates sometimes present with “internships” in non-related fields which are of little use to prospective employers : “If you worked on a campsite or in a bar for six months, it doesn’t give the corporate background employers are looking for.”
Frontline asset management jobs are very much clustered in capital cities, although middle and back office support staff can be recruited in secondary centres. In Continental Europe, labour mobility is a critical issue for the financial services industry. There is not the same culture of moving around as there is in the UK and the US.
Headhunters say it is difficult for firms to sponsor employee moves unless it is a very senior role, so competition is stronger in centres where more candidates gather – like London, which means the firms can pick the best talent.
The quality of life in some Continental European centres is very high – in Luxembourg and Holland, for example, it needs to be a stellar opportunity to get anyone to give that up. It is not just the candidate, but often their partner, wife or family who need to be convinced.
However Higgins says there is an increasing number of French, Italian and Dutch candidates in London, although fewer from Germany. The Eurostar Channel Tunnel means senior executives can easily commute from Paris weekly, and many now do.
While there is a discernible “uptick” in hiring, there is still strong underlying fear of redundancy at many financial sector firms. “It is actually very difficult to get information on the real position, because firms don’t want that kind of focus on themselves.,” explains Higgins. “Companies are twitchy, there is still a lot of uncertainty.”
Most asset managers are already running fairly lean teams,;everyone is working harder with less, and there is not much more “excess” to cut. The big cuts occurred in 2011, and things have settled down a bit.
“What we perceive is some spend on IT and Operations in order to be ready with extra capacity if there is a market rally and resumption of growth.”
Some firms are simply holding out for the quality of candidate they want, and consequently there are hundreds of vacancies yet to be filled. “It is increasingly difficult to get rid of unsuitable people, so firms are taking a lot of care over who they are hiring,” says Higgins. “It is less about qualifications, although those are a given in a tight market, but also about a personality that suggests teamwork, resilience, confidence, integrity.”
With the expected cycle of industry consolidation coming up, the recruiting world is alight with talk of who will buy, and who will build. Some firm know exactly who they want to hire and are waiting for the right moment to try to lure them away. The likely separation of banking and asset management activities will certainly present new opportunities for candidates and recruiters.
“Banks and asset managers have a different culture, and different skill sets, which we have been telling employers for years,” says Higgins. “But it is even more apparent now. There are some talented individuals who can make the transition, and they are usually from a structuring, trading or sales background, but there is no huge desire among asset managers to hire from the banks. The buyside experience is very different.”
After a “steady” first half of the year, the second half looks only to get tougher. “We expect brief flurries of activity around deals, notice periods and then of course the real urgency in January, the traditional bonus season, when there is a lot of reflection on career paths.”