It’s no question that the events of 2020 have significantly impacted the Investment Banking hiring landscape throughout the year. No one could have predicted Covid-19 and the work-from-home environment that we’ve learned to accommodate to over the past few months, and the effects are sure to leave a lasting impact within the investment banking market. We’ve been compiling notes and data related to the hiring trends that we’ve seen this year and those that we expect for 2021.
When Covid-19 first hit the US, M&A came to almost a complete halt due to the uncertainty surrounding the virus and how it would impact the financial market. Teams were also forced to adapt to a new work environment as the stay-at-home orders required individuals to work remotely. Even after adjusting to the new environment, M&A activity was still slow resulting in industry-wide layoffs which seemed to impact the middle-market and bulge bracket banks more significantly. For energy bankers, the Covid-19 outbreak coincided with a struggling oil & gas market which led to some banks eliminating their energy teams entirely if not able to pivot into new products like restructuring or new verticals like renewables.
Luckily, the banking industry overall is making a comeback and M&A activity is starting to pick back up. Hiring was done on mostly an as-needed basis apart from senior hires where we saw more growth. The Selby Jennings team saw many banks looking to add revenue generators in preparation for the 2021 year. Still, some growth hires have happened at more junior levels as there is an influx of strong talent coming from the layoffs. With the Covid-19 cases rising again in the fall and the US election occurring, hiring stayed steady rather than peaking in Q4 like some expected it would.
One trend that we’ve noticed as a result of Covid-19, is the spreading out of bankers into second-tier cities that were not previously hot-spots for investment banking offices. Individuals are relocating and banks are looking to establish offices in smaller cities including Detroit, Nashville, Denver, and Phoenix, just to name a few. We’ve also noted more flexibility when it comes to remote work, especially for senior-level positions as teams have proven to be just as successful in this remote environment.
As we look forward to 2021, we anticipate an active Q1 in terms of hiring as firms will be looking to lock in their teams as soon as possible to tackle the busy year ahead. With an optimistic outlook for M&A activity over the next year, now is a great time to reassess your teams and determine where you want to be and who you’ll need on your team in order to get you there.
If you are looking to secure talent for your team in this rapidly growing market, get in touch with the Selby Jennings Team today.