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The Hiring Environment Now – The First Quarter of 2009
“How Bad is It?”
2008 was a rough year to be employed in the financial services industry, with thousands losing their jobs and many more seeing a significant cut in their all important year-end bonuses! Has 2009 started off in the same bleak manner or is their hope to be found within the Financial Services space?
The phrase “Financial Services” has become an all encompassing phrase used by many to include numerous industries including, investment banking, commercial banking, mortgage banking, asset management and alternative investments to name just a few. But when you more closely analyze the “Financial Services” you will notice that 2008 was not terrible for some of the above mentioned industries and has started off fine for some of these same industries in 2009.
The majority of the job losses that came from the financial services in 2008 originated in investment banking, mortgage banking and commercial banking. Unfortunately PrivateEquityJobs.com does not see these roles coming back anytime soon. When they do become available again, in many cases they will be vastly different especially their compensation structure and potential. Alternative investment firms such as Private Equity firms and Hedge Funds did experience a greater level of layoffs especially towards the end of the 4th quarter than they have experienced in the recent past, but as a whole these industries did reasonably well considering the overall economy and credit environment. Additionally you must remember most of these firms are smaller in total head count than a first or second year class of an Analyst program at one of the large bulge bracket firms.
But as we reported in this newsletter for most of 2008; hiring has taken place within certain strategies of these alternative investment firms. The firms which truly felt the pain and most likely laid off professionals in 2008 were the large multibillion dollar organizations which use leverage for a large part of their transactions. This observation has continued into 2009. The large firms have pared back their hiring and continue to layoff employees including senior professionals. Smaller firms and especially firms focused in the Middle Markets or smaller capitalizations are continuing to hire.
The difference this year is that the competition is stronger and the candidate pool much larger than in the past. This large strong candidate pool makes it even more important that as a job seeker, whether passive or active, you must position yourself specifically for each role. This includes making specific changes to your resume and transaction sheet for each opportunity. Identify what makes you valuable for the opportunity and make sure to express this specific valuable trait through all of your correspondence with any potential hiring authority.
In just the past few weeks we have seen an uptick in opportunities and we believe this uptick will continue for the foreseeable future as long as no other surprises take aim at the marketplace. Even more interesting is that we have seen a continued interest in hiring marketers or asset gatherers for these funds. This is interesting because many professionals would say that these roles are a cost center for at least the first 6 months of their employment and hence their hiring typically occurs when firms have additional cash or see additional revenue being created in the near future.. The belief (perhaps hope) is that if these firms are willing to hire marketers now, because they see the second half of 2009 not looking as bad as some might suggest. There is a lot of money on the sidelines and the smart firms want to start the marketing process now so that they can be on the short list when this money is freed for investment capital.
In regards to specific strategies, the hiring continues to occur mainly with middle market or smaller capitalization focused Private Equity firms and within highly quantitative and sector focused long/short hedge funds. Furthermore, we have seen a pick up in restructuring roles which would be expected and those professionals who have experience with distressed investments either from an investment perspective or operational perspective. The large multi-billion dollar firms have continued with their Post-MBA Associate hiring but even these Associate roles are being reduced in head count. The smaller firms are also hiring Post-MBA Associates and in some cases hiring additional Associates due to the future outlook of work for them. Finally the hiring for professionals in the accounting space whether at Private Equity firm or Hedge Fund continues to be strong and shows no signs of weakening in the near future.
Overall January 2009 is not as strong in regards to hiring as your typical January which historically is the strongest hiring month of the year, but there is hiring occurring and more then most people believe. Furthermore some of the hiring might suggest that these firms see an end to this negative period.
We at PrivateEquityJobs.com think 2009 could end up being a good year for hiring in the Private Equity and Hedge Fund space. We believe the hiring will continue to grow as people become more comfortable with the economy. We need to get the money off of the sidelines and into the market. At that point there will be a serious need to hire experienced investment, operational and accounting personnel. Historically Financial Services hiring has swung from a pendulum from one extreme to another, presently we are on the negative side of that pendulum and will need to correct ourselves in the near future.
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