Investment & Corporate Banking

1. How would you describe the current recruitment market? How has this impacted on compensation?

Relatively flat and subdued. Whilst there is still strong outflow of Investment Banking Analyst and Associate level candidates looking to make the move to ‘buy side’ roles (private equity, special situations, funds management, corporate), there isn’t necessarily the same number of roles being replaced by the banks except for critical hires in busy teams (mainly Infrastructure and Utilities due to deal environment and labour intensity of work). When the more senior levels leave the banks there is often a more junior resource hired as a replacement to try and alleviate the bottleneck at the senior VP / Director levels.

On the Institutional Banking side, there has been some movement from big 4 local banks to international banks, mostly at the Associate and AD/VP levels versus the more senior ones but this could be on the agenda this year. The driver still appears to be more exposure to deals and clients given the smaller team sizes, as well as opportunity to expand skills more quickly.

Compensation in the banks remains competitive, particularly at the junior and mid levels, to ensure that they can keep hold of their talent as very difficult to rehire this level. Some senior bankers are taking cuts to their compensation to allow the junior staff to be remunerated well. Challenging conditions globally for the investment banks mean US and European IB’s are seeing their bonus pools remain relatively flat.

2. Any client or candidate trends observed over the last 12 months?

Client side: focus is still on trying to retain talented junior bankers which has led to more of an emphasis on improved working culture and increased compensation. Banks know how tough it is to replace the 2 -5 year experienced banker and so will do what they can to keep turnover to a minimum. Gender diversity also remains on the agenda, as well as allowing rotations through different coverage teams to cross skill bankers.

Candidate side: on the whole still a reluctance to move bank to bank – and if a move does take place, it is often as a result of candidates seeing more opportunity for promotion in a new firm given team structures or desire to move into another sector group. Banking candidates looking for new roles remain keen to transition to buy side or corporate roles where they can diversify skills and work outside of advisory and sell side models. International mobility remains high on the agenda for many senior analysts across the banks which is a way of retaining staff within an IB or at least the advisory discipline.

3. Predictions:

Expect to see some replacement and perhaps upgrade hires post-bonus season in early 2018, particularly at senior Analyst/Associate levels, and perhaps some strategic senior hires across the investment banks. Expect to see more international moves and interest in the buy side. Despite higher levels of base compensation, we don’t expect to see that changing the number of inbound enquiries from bankers looking to leave the industry.

4. Any interesting case studies?

We have seen an increase in interest from candidates looking to move to venture capital/growth investment funds which is being driven by the number of funds and amount of capital seemingly in the local market to support these. But given the size of these funds, there isn’t a huge supply of job opportunities and often on the VC side talent being sought is from various industries and not just corporate finance/banking, and so there is a definite mismatch on supply and demand.

Jon Michel
02 9235 9410

Ali Roger
02 9235 9450

Patrick Everest
02 9235 9440

Rob Hockedy
02 9235 9470