For each quarterly print issue of Global Custodian we tend to produce a one-page summary of all the biggest job moves over the quarter, where there’s usually a lot of switching between BNY Mellon, State Street, JP Morgan and Citi and a sprinkling of regional additions and exits.
In putting together the current edition, I’m running onto three-pages of these moves…and I’m still going. Despite it being ‘vacation season’ in many regions and being in the midst of planning a return to our new definition of normal, there is a major reshuffle going on in the securities services hiring space.
Now, I have to admit, I don’t have statistics across the hundreds of countries custodians and fund service providers operate in to back this up, purely observation, input from experts and the views of securities services recruitment specialist Paul Chapman, managing director at HornbyChapman.
“From my perspective this market is one of the hottest I’ve experienced for many years. Unless there is a major structural issue or renewed pandemic conditions, my sense is that this employment bull run will continue for another year or 18 months, when the market will take a pause for reflection and to cool down somewhat,” he explains.
So, what is behind this? After all, aren’t we still in the midst of a global crisis?
There are a few factors behind the recruitment boom right now. Firstly, we’ve had a backlog of up to 18 months of hiring freezes and a ‘take care of your own’ mentality towards incumbent employees. With a lot of ‘steadying the ship’ going on – please excuse all the idioms, they are especially apt in this piece – many firms were intent on retaining their talent in order to continue to service clients and give them a feel of consistency and security during a difficult period. But now, as we seemingly emerge – in some countries – from the worst impacts of the pandemic, the foot is going back on the accelerator. Custodians and fund services providers are hiring in their masses causing wages to spike, as the possibility of integrating new staff into a physical office becomes a reality once again.
Travel is starting again, the opportunities to win new business and network begin again, and guess what – these custodians have some new things to sell/develop. While I’ve written about the potential for consolidation in this space, there is some greenfield in spaces such as alternatives, private markets, digital assets, data provision, ESG and the development of blockchain other new technologies.
“COVID has given the adoption of technology a turbo boost but, at this point, implementation of that technology still requires a significant body of humans to be effective, meaning IT-savvy folks - especially those which can be the interlocutors between ‘pure tech’ and the business side – are in demand,” adds Chapman. “Sales folks are in particular demand, in addition to onboarding/ implementation experts and product SMEs, especially in the DLT/ blockchain space. The area where demand is highest and supply lowest is undoubtedly alternatives – primarily for salespeople.”
“As ever, the underlying causes for this fast market are myriad and reflect the wider economic environment – trading volumes have been strong, indexes remained high and there’s a large quantity of liquidity within the market with strong hints of ongoing government support on a global basis. With interest rates at historic lows, firms are incentivised to look further afield in order to seek appropriate returns, and be more aggressive in how they do that.”
And what about the individuals themselves? Well, consider the difficulties of moving jobs during a pandemic, where you can’t integrate into a team in-person, and then imagine how many people have stayed put even when they have had one foot out of the door.
Those who have stayed put, possibly experienced pay-freezes or capped bonuses may be tempted by a change of scenery and benefiting from the salary spike. On a more sentimental note, COVID gave many a different perspective on life and their balance with work, the importance of family time and where their priorities lie. Chapman echoes my thoughts on this.
“From an individual’s perspective, the pandemic and related, enforced lack of travel, has allowed valuable thinking time and many employees have been able to scrutinise their firm’s – and manager’s – performance in greater detail,” he adds. “They have a heightened sense of their own mortality and the passage of time and this – coupled with an appreciation that work is such an important part of their lives – means that many have chosen to seek firms with a better work-life balance or, in some cases, leave the industry completely.
“For a certain percentage of the working population within our world, they are now much keener on quality of life and experiences that long hours and constantly seeking the faster car or the bigger house – the perennial City curse of affluenza might finally be on the wane for some.”
From my perspective we are seeing moves in the top securities services roles among the tier one players, there are additions from other industries to drive digital transformation, while others are switching from established custodians to FinTech start-ups (not a new trend) and digital asset firms (slightly newer trend) at an alarming rate.
These were observations of mine, and I asked Chapman about other trends he was seeing, where he pointed out geographic differences and a move towards greater diversity in the industry.
“In terms of geographies, London remains exceptionally strong; Brexit is to all intents and purposes a non-issue, and London remains a superb location to be both an employer (a plentiful supply of local, educated, energetic labour – an excellent example of Porter’s Cluster Theory) and an employee. London is vibrant, safe, diverse, progressive, welcoming and culturally rich.
“Hong Kong has slowed a little given the ongoing political situation but is still benefiting from Singapore’s focus on domestic talent pool pretty much to the exclusion of all others. The Middle East is relatively strong as a market and as a destination; however, volumes remain low. Similarly, the US tends to hire domestically, but they’re more down to the availability of talent than for political reasons.”
On the diversity front, Chapman commended Women in Asset Servicing (WiAS.co.uk) and the work of Northern Trust’s Kate Webber – who featured in this GC Stories podcast – which has done much to highlight the attractiveness of working within the asset servicing industry and attract a whole new group of “engaged, lateral-thinking” women into the industry as well as create a more attractive, level playing field for them.
“Firms are hiring on a diverse basis – anonymised CVs, gender-balanced candidate submission lists, employing techniques such as the Rooney Rule which all help open the door and level the playing field for a stratum of potential employees who were historically excluded or overlooked in the jobs market,” he adds.
All-in-all, there is a major reshuffle going on in the securities services space as a perfect storm of opportunity and itchy feet collide to spark widespread movement across the industry.