December 1, 2023

Investment Banking

Let Your Investment Banking Do The Walking

The truth about the finance job market at the end of 2022

Our job postings at eFinancialCareers are some of the most well-rounded and market-representative in the financial industry. We’ve analyzed some of the trends we’ve seen for the last two years to give you a picture of what the job market has behaved like since then – although divining the future is up to you.

The charts below show the evolution of the number of jobs posted globally by sector on eFinancialCareers since November 2020. The charts are indexed, with Nov 2020 as 100.  The main takeaway is that the most active jobs sectors in financial services now aren’t growing; they’re stagnant. 

Job openings in investment banking (M&A, capital markets) might seem to be on a roller coaster ride, but it’s a tame one compared to the wild swings of private equity jobs. Investment banking jobs climbed erratically between November 2020 and July 2022, but – worryingly for young investment bankers – investment banking jobs have plummeted since. This might have something to do with the fact that banking revenues themselves are down around 50% in 2022 versus 2021. 

Things might improve. Deutsche Bank, for example, told investors on its Q3 earnings call that it expected a “better year” for investment banking in 2023 – although it would be hard to do worse than 2022 – and Bank of America has already announced that it would not cut IB jobs, Bloomberg reported.

Private equity hiring, meanwhile, seems to follow seasonal patterns and to fluctuate wildly, although its more recent fluctuations have driven jobs lower than for the past few years. For the moment, PE jobs appear to be plateauing at a low rate. 

Jobs in the middle office are less erratic than in investment banking, but they’re not growing either.  Only compliance jobs are currently more plentiful than they were in November 2020. Although risk jobs have been waning, they haven’t been as lacklustre as tech jobs.  Maybe people leaving technology firms won’t get jobs in finance after all? 

Offshoring remains an issue in major financial centres. William Wright, the managing director of New Financial, a UK-based think tank, noted in a research paper that “Many firms… have offshored large parts of their support operations to countries like Poland – not because of Brexit, but because it’s a lot cheaper than employing them in London, Edinburgh, Manchester.”

You might think that sales and trading jobs would be thriving now. After all, fixed income currencies and commodities (FICC) traders in particular have performed strongly in 2022. In reality, trading jobs are down too compared to last year.

As the chart shows, FICC jobs have been on a downward trajectory throughout the period, although have plateaued at a low level in the latter half of this year. Equities job openings have also fallen since July. Hedge fund jobs have been more stable but are steady on last year.

Why aren’t more jobs being created? The revenue success of the FICC sector as a whole masks a variety of conditions in its constituent parts. Credit traders, for example, are doing very badly, with revenues down 36% YoY and on track for their worst year since 2012, Bloomberg said. On the other hand, Commodities are doing well. So too are macro desks – Deutsche’s rates revenues doubled in the third quarter, for example. 

Equities trading jobs are also waning. The equities sales and trading sector has had a flatter year generally, despite a 10% equities revenue increase at Barclays in the first nine months.  

The charts above are based on global figures. There may be regional differentials. In New York, for example, things are looking up. The New York state comptroller’s report on the securities industry – which covers the biggest finance employer in the world, Wall Street – estimates that the state’s securities industry added 1,600 jobs in 2022 (through to September).

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