Working in investment banking comes with a certain image, and we’re not talking about the vilification of the industry in the popular press. Graduates expect a high-performance culture, client-facing opportunities and the chance to work in gleaming skyscrapers in Canary Wharf or grand buildings in the City of London. Increasingly, however, the reality is decidedly different.
When it comes to operations, and to a lesser extent technology (which we cover elsewhere in this guide), more investment banks are ‘nearshoring’ jobs to locations across the UK. Graduates therefore have to consider the likes of Belfast, Birmingham, Bournemouth, Glasgow, Manchester and Newcastle-under-Lyme as places to base their careers.
“Across technology, finance and operations we take on at least as many graduates in the UK as for front office positions, and the majority of these are based outside of London,” says Simon Cooper, CTO for the corporate and investment bank tech core processing group at J.P. Morgan based out of Bournemouth. “We often need to underline to undergraduates that investment banking careers are not restricted to London and that excellent careers can be built in our nearshore centres in Glasgow and Bournemouth.”
This year, it’s not just back office roles gravitating outside of the City. In 2012, for the first time, Deutsche Bank is offering a number of sales and trading positions for graduates in its Birmingham office. These are client-facing coverage roles, the bank tells us, but would be more regionally focused than those roles based in London.
Lower cost, lower salaries
The cost of doing business, in terms of renting office space, is less in these nearshore locations and – in places like Scotland, where the government offers Regional Selective Assistance grants – there are also financial incentives to set up shop, as was the case with Morgan Stanley, BNP Paribas and Barclays.
However, salary demands are also a lot lower than the City. While the average investment banking salary for graduates in London came it at £45k this year, we’re told that starting salaries for graduates in near-shore operational roles is £22k.
Another reason for basing these roles in locations outside of London is what Cooper describes as a “less liquid” labour market. “We find that there is a lower rate of turnover in both Bournemouth and Glasgow, in part because of a less liquid market, but also because our retention strategies are robust in these locations.”
The ongoing challenge to fill the vacancies
Investment banks have historically struggled to fill these positions – while front office roles are hoovered up by intern conversions or closed to applications by November, back office and finance positions often extend their deadline into the new year. These positions do attract a decent number of applications, but by and large the local universities still provide the bulk of hires, suggest the recruiters we spoke to.
However, this is starting to change. One senior director for a bulge bracket bank in Glasgow, speaking on the condition of anonymity, told us that they recruit for 20 roles a year and – in order to ensure a high enough calibre of candidates – require at least 200 applications, which they had previously struggled to attract, and largely came from students north of the border. Now, however, more people from universities in London and England are interning in Glasgow, and often keen to covert these into a full-time position, he claims.
One concern continues to raise its ugly head, though – offshoring. With investment banks curtailing costs, it’s questionable whether the UK will prove cheap enough. To some extent this is already happening – Credit Suisse is moving jobs out of Singapore and into Poland, while Barclays and Morgan Stanley have recently shifted roles from Scotland to India and Eastern Europe.
However, investment banks insist that the type of roles being offshored are merely “low-value” and those graduates recruited on to formal training programmes shouldn’t be affected.
Where the graduate jobs are outside of London:
Where?: Glasgow, in its ‘centre of excellence’
Divisions recruiting for: Operations – both for investment banking and wealth management
Divisions recruiting for: Operations, technology and legal. New recruits are initiated into the world of investment banking through the bank’s six-week ‘academy’ training programme.
Divisions recruiting for: Sales & Trading, Operations, Technology
Where?: Bournemouth and Glasgow
Divisions recruiting for: Technology, operations (including transaction processing), client services and corporate groups in Bournemouth. Technology in Glasgow.
Divisions recruiting for: Technology (related to its global wealth management division) and Operations.
Royal Bank of Scotland:
Where?: Newcastle-under-Lyme, Manchester
Divisions recruiting for: Operations in Newcastle-under-Lyme, Operations and Sales in Manchester.
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