Hiring Trends 2012

Looking back – Hiring Trends in 2012

Economic recovery continued in the financial services sector as indicated by the Bureau of Labor Statistics finishing 2012 at 5.1%. This contrasts with the national overall unemployment rate ending December 2012 at 7.8%. Interesting to note the national rate ended December 2011 at 8.5 and the peak in 2010 at 10%.

The chart below shows the unemployment rates for the “Financial Activities Industry” sector from 2008. This category includes Finance and Insurance as well as Real Estate sectors of the market.

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2008 3.0 3.4 3.4 3.4 3.7 3.4 3.6 4.2 4.0 4.5 5.2 5.6 3.9
2009 6.0 6.7 6.8 6.0 5.7 5.5 6.1 6.0 7.1 7.0 6.7 7.2 6.4
2010 6.6 7.5 7.7 7.6 6.8 6.9 6.4 6.7 6.3 6.7 6.7 6.4 6.9
2011 7.2 6.9 7.1 6.7 6.8 6.8 6.0 6.2 5.5 5.8 6.1 5.6 6.4
2012 4.9 5.3 5.7 5.5 5.1 5.6 5.1 5.3 4.8 4.9 4.7 4.1 5.1

Investment Management Recruiting (IMR) has seen corresponding expansion in hiring as a result. We have placed candidates across the board from Portfolio Managers, Analysts, Marketing Professionals, and Operations. We have found that there has been renewed demand particularly for talented sales/marketing professionals. This group was widely laid off starting ’08 as firms struggled to have products to market. Today we see firms repositioning for growth. In contrast we have seen excess supply for pure equity analysts seeking positions with too few options and a struggle for junior candidates who lack internships and strong academic credentials. IMR is seeing a trend in young people working toward their CFA to distinguish themselves from the competition. Overall, the increased hiring activities are good news for jobseekers in the financial services industry.

IMR has seen another trend in higher than normal turnover across many firms over the past year. We believe this is a result of several factor.

    • The hiring slowdown starting in ’08 caused many people, who might have considered a job change, to hold tight. Now that hiring has picked up these candidates are now reinvigorating their job search.
    • The 5 year itch. Since ’08, those candidates reaching 5 years with a firm have grown in tenure and experience, but firms are not necessarily rewarding their employees with increased responsibility and financial growth. After 5 years, candidates reassess their value and continued opportunity for growth. These candidates are now searching for new positions.
    • Firms repositioning. As trends in the market change, firms restructure to meet the demand for change. We’ve seen more firms shut their doors over the last couple of years such as Rigel, Mastholm and Sparta, and other firms who have had to reallocate staff and internal departments. As are result we’ve seen firms redesign their human resource efforts implementing new process to retain employees, reposition staff for better efficiencies, and firms reconsidering how they attract new talent.

Trends in salaries and bonuses

While the hiring trend is back, it seems gone are the days of paying lofty salaries to attract talent, signing bonuses, 2 year guarantees, and guaranteed annual bonuses. Fortunately candidates are still being paid competitive base salaries consistent with their experience and expertise. The trend in bonuses is excess compensation based on overall firm profitability.

The problem for some highly paid employees seeking new positions (typically embedded in larger firms) is their golden handcuffs. They would love to leave their current roles, but feel quite trapped because they can’t walk out the door without significant risk in rebuilding their income stream. Attracting this particular pool of candidates is more difficult because hiring firms are not willing or can’t match the current compensation structure.

The CFA society’s 2011 compensation survey can be found: http://imrecruiters.com/about-us/blog.

Steps for Candidates

IMR is encouraging candidates to look for firms with STABILITY over promises of potential bonuses. Candidates should be putting in their time and doing their research to discover if they are joining a stable firm that is not on the brink of being sold or teetering on the edge of collapse. We are seeing a lot of candidate starting to get jumbled resumes. While some of this is easily explained, there are still perceptions issues by firms, if a candidate is going to make a good long term hire.

IMR is also trying to encourage candidates to negotiate a bonus structures based on some personal performance metrics in additional to a metric based on firm profitability. These can be in the form of commissions, investment performance success or quarterly agreed upon accomplishments. Employees and employers need to create ways of keeping their employees interested in their jobs by creating an increasing path for financial success.

In addition young people must find ways to incorporate internships into their academic years and we encourage investment firms to hire interns to join their firms to gain experience.