Whether it's called "aggressive recruiting" or poaching, financial services firms across the board are predicting the practice will only intensify in the coming year, forcing many of them to sweeten their offers and actively seek out skilled professionals both within and outside the industry.
Ah, but how do you accomplish this in an environment where regulators, the media and the public are scrutinizing Wall Street's storied bonus structure with a disapproving countenance and every brokerage firm, private bank and broker-dealer is looking for these very same scarce resources?
According to a new survey of more than 200 outside recruiters and hiring managers at Wall Street firms conducted by eFinancialCareers, a network of career sites for financial services professionals, 57% said they expect poaching will become "more aggressive" this year compared to just 2% predicting "less aggressive" tactics.
These days, when it comes time for a financial services firm to roll out a new product or attack a new geography, most aren't willing -- or can't afford -- to invest the time to train or transition existing employees to the new apple of their eye. Instead, they seek out top performers or, increasingly common, top-performing teams in a particularly specialty and start throwing money at the problem.
"What you will find is that the two industries where you have the tightest demand -- technology and financial services-- is where you will have the most competitive labor markets and the most poaching," said Constance Melrose, managing director of eFinancialCareers North America. "These are highly specialized roles with a high value-add and there simply isn't a lot of excess supply for these roles."
Melrose said her network of position and resume posting websites has seen an increase in new job openings between 30% and 35%, ranging from back-office positions such as IT to middle-office gigs for compliance officers and a flurry of front-office, customer-facing roles where driving revenue and increasing clients is the priority.
"Obviously, compensation is a key component, but it's also important to remember that on Wall Street it's not always the No. 1 thing on someone's mind," Melrose said. "Sometimes it's about the opportunity for an individual or a team to have a bigger impact. People who move need to know if they leave, they're still going to have an opportunity to build out their careers."
That's probably a very good thing, especially since most Wall Street firms have, either by choice or force, dramatically scaled back bonuses in the past few years. After peaking at more than $35 billion in 2006, Wall Street bonus plummeted to around $20 billion last year and down to about $18 billion this time around, according to a recent Wall Street Journal report.
However, the survey revealed on Wall Street there's little consequence to jumping ship and returning to one's old stomping ground if and when things go awry on the other side of the fence.
Twenty-five percent of hiring managers said they would allow a once-poached former employee return to the fold while only 9% percent said they would be persona non grata. The remaining majority, 66%, said they'd evaluate a possible return on a case-by-case basis.
More troubling to Melrose, is the finding that only 41% of Wall Street institutions have taken the time to assess which of its top performers are most at risk of being poached by a competitor. While 42% said they do make these types of evaluations and, presumably, take measures to ensure a decent retention rate, those firms that haven't embarked on this critical self evaluation are ripe for the pickings.
"I would heartily encourage this group to get more aggressive," she said. "Wall Street moves very fast. Most firms can't wait to train people. They need to get talent on board quickly and they will do everything they can to get these specialized, proven performers.
From the labor pool's perspective, Melrose said it's equally important that they keep their pulse on the market place and closely monitor the developments in their investing specialties to increase their profile and make them more attractive to would-be poachers.
"That’s one of the reasons people are increasingly looking at eFinancialCareers," she said. "They need to understand the direction of these sectors in the overall financial services market. They can look and compare and put their hats in the ring to get themselves known and noticed by employers."
While only 43% of those surveyed said they had poached a professional from another industry to fill a whole in their organization, that figure will continue to rise as the economy improves and the available reservoir of talented financial services specialists evaporates.
Experienced professionals from the technology, accounting, consulting, legal and energy industries thus far have been the most coveted and easy to transition to Wall Street, according to the survey.