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Hiring strategies in an ever-changing investment banking landscape

Posted on May 2022 By Selby Jennings

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​The investment banking sector has never been more competitive. From digital disruptions, new fintech incumbents, to rising inflationary pressures, these are some of the driving factors creating many challenges – as well as opportunities – for firms.

However, to embrace new realities and reap the rewards, organizations will need an agile talent strategy. That’s why understanding the motivations of talent and their movements within the industry is crucial in competitive markets. In this blog, as we look to the future of investment banking and challenges the sector faces, we explore some of the major hiring trends that firms should know about.

New world of working

A significant factor confronting banking leaders is the challenge of strategically re-evaluating the modern workplace. Employers have had to make substantial inroads to develop a nimble and competitive operating model that delivers value-add to employees and customers alike. What’s more, with the surge in popularity of flexible working, many firms could lose out on business-critical talent if they cease to offer this structure. Although the flexible working paradigm is forecasted to negate the idea of ‘in-person collaboration’, this business model actually creates more opportunities for candidates to interview and get hired because location is no longer a limitation.

Most bankers operated remotely in the first quarter of 2021. However, with the roll-out of regional vaccine campaigns, banks began to dangle the thread of a return to the office on a full-time or hybrid basis. Across the US, a bank-wide trend saw many firms open up discussions about an expectation for employees to be in the office post-July 4th. Subsequently, the end of summer marked the end of 100% working from home arrangements. At Selby Jennings, we are advising our clients to keep an open mind with flexible working, as this should certainly be considered a competitive strategy to attract and retain talent.

The sustainable imperative for investment banks

The transition to a low-carbon economy is on the frontier for today’s investment banks. Efforts to combat sustainability has led to exponential growth in ESG debt, perhaps underpinned by investors propelling ESG investments into the market. The increasing focus on ESG debt allows firms to tap into new pools of capital and garner surplus returns, but more capital raising from the public and private sectors will be needed if targets are to be met.

The movement towards sustainable banking and investing is important to help eliminate ‘greenwashing’, but international compliance and better reporting standards are needed. Whilst sustainability commitments are becoming more commonplace, having strong ESG credentials might be your edge to attract and retain talent. After all, when we surveyed our community of sector professionals, 48% of respondents reported that ESG is important when looking for a new role. Our findings could indicate that a major paradigm shift amongst investment banking professionals has begun – with many placing environmental policies at the crux of their career-defining next steps. We predict global ESG concerns to continue shaping the future of finance and be a compelling force for companies to drive employee and customer loyalty.

Industries of focus

The investment banking landscape is heating up, but what are the key verticals that took center stage across the hiring front? Fintech’s exist on the precipice of innovation, which is possibly why they’re so successful at luring in business-critical talent. Despite valuations being a little off kilter, more fintech’s and technology-driven bankers entering this space is a certainty due to the potential for tech M&A’s and IPOs. Hiring activity across technology, media, and telecommunications (TMT) and power, utilities, and infrastructure (PUI) is also a necessity to plug the gaps.

The healthcare sector is another area of increasing focus, perhaps because its largely immune to post-pandemic disruptions. With a particular emphasis on sustainability, renewables are also expected to see an acceleration in hiring across the board. In particular, ESG analysts along with sales personnel are a hot commodity in the market. For those considering talent management in these growing environments, we advise to quickly get your teams in place to be well equipped to ride out whatever challenges lie ahead.

Interested in learning more about the recent developments in investment banking? Download our newest guide, The Investment Banking Briefing, for an introspective analysis on the investment banking industry trends and exclusive talent insights from our survey results.