Something strange has happened in the world of equities sales and trading this year: revenues have risen by 28% in banks' equities businesses according to analysts at Deutsche Bank, but hiring hasn't responded. Even in the new up-beat environment, experienced equities professionals are sitting out - still waiting for the offer of a decent job. Some banks, like Credit Suisse, have even made surprise equities layoffs.
"There are a lot of senior equities people waiting to get rehired," said Tony Shiret, the former Credit Suisse and RBS analyst who recently found a new job at Espirito Santo in London. "Banks seem to be very cautious about rushing in to recruit again - there are some big IPOs lined up for next year, and the stock markets have been rallying, but there's also a fear that this could prove transitory if quantitative easing is reduced in the U.S."
The eerie lack of hiring in the past 12 months was despite a bludgeoning of equities headcount in 2012. Research firm Coalition calculated that staff on equities sales and trading desks fell by 8.5% last year. Expensive, senior staff often bore the brunt of the cuts.
"Banks are making do with junior and mid-ranking staff," said one equities search consultant, speaking on condition of anonymity. "In sales, they're almost all under-servicing their clients and are relying on inexperienced people to pick up the slack." He said senior equities salespeople who used to receive regular headhunter calls are now ignored: one global head had received no headhunter attention since June.
Will this change in 2014? Deutsche Bank analysts are predicting a 14% increase in cash equities revenues next year. The headhunter we spoke to said all banks have some spaces to fill and that sales teams in particular look under-staffed. There are a few promising signs already: Barclays is building a new equities sales desk and Goldman Sachs recently hired Tobias Edelmeier, a junior equity salesman from Barclays.
Chris Wheeler, a director in equity research at Mediobanca said salespeople need to keep their hopes up: "If you work in equity sales, you need to create your own momentum. By 10.30am most of your work talking to clients is done and you need to spend the rest of the day maximising value if you don't want to fall into a slough of despondence." A few headhunter calls might help buoy the spirits and keep despondency at bay.
For the equities professionals who are out of the market, 2014 could bring a reappraisal of the new reality. "If things don't change, people will have to recalibrate their expectations in terms of pay," said Shiret. "It's supply and demand at the end of the day."