Banking recruiters are returning to the global financial centres of New York, London and Hong Kong as the economy picks up a head of steam, lifting pay and bonuses at investment banks.
A buoyant mergers and acquisitions marketplace has coincided with a heathy start-up sector producing a stream of IPOs. Together, these trends are spurring potentially the strongest recruitment cycle at banks since Lehman Brothers collapsed, and the first rise in investment bank starting salaries in five years.
“In New York, the banks have come back,” says Roxanne Hori, associate dean of career services and corporate relations at NYU Stern. A stone’s throw away from Wall Street, the business school expects 27% of its MBAs to join investment banks this year.
The bulge bracket banks such as Citigroup, JP Morgan Chase and Bank of America Merrill Lynch are hiring the most. But the recruitment wheels are also spinning at smaller firms.
“Students are not only looking at bulge bracket firms but also have opportunities at middle market firms and at smaller boutiques,” says Regina Resnick, associate dean for the Career Management Center at New York’s Columbia Business School.
This is evident in the growth of mid-tier firms such as Wells Fargo, which has broken into the global top-10 investment banking fee-earner list — ahead of Credit Suisse and Deutsche Bank. Boutiques also have an increasing presence in investment banking, illustrated by the rapid growth of Robey Warshaw, set up by the former heads of UBS’ and Morgan Stanley’s investment banks.
“Hiring is active across all sizes of banking organizations,” says NYU Stern’s Roxanne.
Yet more students are opting to ply their trade in other areas of finance, such as wealth management, private equity and hedge funds.
Jacques Olivier, program director of the Masters in Finance at HEC Paris, says the business school is seeing students transitioning from investment banking to the so called buy-side much faster than before the crisis.
“There are fewer students going into sales and trading and more students going into M&A and strategic consulting,” he says.
In London, the recruitment market is no less buoyant. For example, at London Business School, 40% of full-time students are employed in the financial services sector.
“Banking recruitment is very strong,” says Christian Dummett, head of finance Careers at LBS, with the number of MBA level internship offers this year significantly higher than in 2014. “The key driver is a marked increase in M&A activity globally.”
This is despite the relative decay of UK investment banking, with Barclays, RBS, Lloyds and HSBC all announcing cuts in investment bank headcount over the past year. Investment banks’ front office headcount continued to shrink in the first quarter of 2015, down 8% from last year, according to figures from Coalition, the London based research firm.
Instead, experts point to an increase in hiring for associate level posts, which can be filled by undergraduates and pre-experience masters graduates, who command less pay than MBAs.
“The trend in the industry has for some time now been a shift away from hiring MBAs into investment banking or sales and trading jobs,” says Mark Davies, employer relations manager at Imperial College Business School in London.
Finance is having to compete with the more entrepreneurial working environments of technology firms like Google and Amazon, he says.
“Banking and finance continue to be popular and highly competitive career choices,” says Sarah Juillet, director of postgraduate careers at London’s Cass Business School. “However we have seen a growing interest in careers in entrepreneurship, technology and healthcare, [while] consulting continues to be appealing.”
The trend of hiring pre-experience candidates has been pronounced in the City but has spread to the investment banking behemoths on Wall Street.
Jennifer Boynton, assistant dean for MBA career management at Georgetown’s McDonough School of Business in the US, confirms this focus.
“In investment banking, firms are working hard to retain undergraduate hires and make them the primary source of junior talent,” she says. “But there is still a need to hire MBAs at the associate level.”
Meanwhile, as China’s financial sector continues to open up to global capital markets, there is growing demand for talent in Hong Kong.
The former British colony has benefited from China’s frothy — although now cooling — stock markets and the opening of the Shanghai-Hong Kong Stock Connect.
Lawrence Chan, a director at CUHK Business School in Hong Kong, says regardless of the recent market volatility there has been recruitment demand from boutique advisory firms, asset managers and private banks.
“There are more and more Chinese financial institutions which are listing in Hong Kong, and they are looking for talent,” he says. Some 40% of CUHK graduates work in finance; 20% in investment banking.
The bulge bracket global banks are also setting their sights on China, with the likes of HSBC and Société Générale shifting resources to Asian markets. As such, Chinese language skills are a hot commodity. “Chinese is a distinctive advantage,” CUHK’s Lawrence says. Employers have also sought to hire students who are able to speak Indonesian or Vietnamese, he says.
There are headwinds, however. China’s stock rout has dented confidence and called into question the role of the state in propping up the market. Regulation continues to bite big banks too, in all global financial centres. Six global banks were recently fined $5.6 billion to settle allegations that they rigged foreign exchange markets. Bankers have also come under pressure on pay, with caps imposed on salary across the EU, hitting the City particularly hard.
“Job prospects for City workers are improving,” says Adam Jackson at London recruiter Astbury Marsden. “However challenges and uncertainties remain — notably the outcome of the EU referendum and the ratcheting up of regulatory requirements.”
Nonetheless there is a rising tide of optimism in banking sectors everywhere. Astbury Marsden points out that the number of new jobs in the City soared by more than 50% year-on-year in May. The latest PwC/CBI financial services survey, published in June, shows banks’ optimism remains strong after hitting a 15-month high in March.
“In many respects, the banks have recovered from the financial crisis,” says NYU Stern’s Roxanne.
Bayes Business School
Best Journalism school in Europe
When I first stepped onto the campus of City, University of London, I knew I was in for a ride - and not just on the Tube! With its vibrant energy and an impressive repertoire of programs, City U became my home away from home. The Journalism program was kind of a big deal. Rumour was that we were the best in Europe! The lecturers were not just experts in their field; they’re practically journalistic royalty. They were invested, passionate, and had a knack for turning the most flat press release into a riveting news story. With their guidance, I’ve learned to navigate the chaotic world of media like a pro. The campus was a melting pot of every culture, being that we had such a diverse international crowd. Being in the heart of London, I had the world at my fingertips - there was always a new corner to explore, a hidden gem of a cafe to discover, or a street performer! City, University of London wasn't just a university; it was a chapter in my life story that I’ll never forget.
The teacher-learner ration is manageable, giving each learner a chance to gain personal attention. It is also easier following up on the progress of a student, as the numbers per class is not large. the conducive environment for learning includes clean classes, standard desks, world class instructional facilities and the opportunity to engage lecturers even after their sessions. The team spirit at City is above board, with learners getting chance to learn both from instructors and colleagues. This is the university of choice; the place to be.
I liked that each class had a manageable number of learners, making the professor-learner ratio favor knowledge acquisition. I also liked that study schedules were manageable, and not overwhelming. The focus on talents and gifts even within the learning environment makes it possible for learners to achieve the best of their potential, and this has worked to the advantage of those that have schooled at City, University of London
The diversity at City University facilitates interactions and is a direction toward the unity of the world. The classes are well built to match the number and needs of all students regardless of the elements of diversity that set people apart. The use of technology in delivery makes learning even more interesting and achievable. At City University there is no distinction pegged on the issues that make people unique.
The team of lecturers at the Uiversity are well experienced. Their level of insight and the methodologies of delivery works for the interes of the leaeners. My learning experience was largely boosted by the level of knowledge of the professors at the institution, and their passion to transfer the same to learners. I appreciate every class I attended because of the level of insight I was able to gather
The best university I’ve been to
The campus and the people I've met have made it a wonderful experience. I was reared in a small town with a graduating class of only 88 individuals, so moving to City University was a huge adjustment for me. My dorm has more residents than my whole high school combined! I enjoy the atmosphere here, and everyone is so friendly. Outstanding academic options and a stunning campus. Really great from beginning to end. The educators genuinely love what they do, and the students are ready to learn. On or around college, there is always something to do with friends, and the social scene is particularly warm.
Bayes Business School
As a student at City university attending Bayes Business School I would totally recommend choosing this university as the experience is exceptional with great social networking opportunities . Professors are significantly helpful, delivering with excellence and professionalism. Everyone is happy to help and make you feel welcomed in such an esteem university as City, offering exceptional development and guidance through out the course.
Economics and Politics
Incredibly amazing university, the way they polish students and help them boost their morale and think intellectually is worthwhile. Many universities have international partnerships to allow exchanges between their students. The most obvious subjects for these opportunities would be those that involve languages, and the study of people and places.