Investment Banking USA Hiring Outlook 2026

Investment banking entered 2025 in a period of adjustment. A new administration and uncertainty around economic direction created knock-on effects that will influence how banks hire, structure teams and compete for talent in 2026.

Against this backdrop, Brianne Sterling, Director – Head of Investment Banking at Selby Jennings New York, outlines the pressures and opportunities that will impact this year’s hiring market. Her observations reflect daily conversations with banks and professionals, giving a practical view of what teams should prepare for and where the strongest competition for talent will emerge:

What changed in investment banking in 2025, and how will it shape 2026?

"The biggest change in 2025 came from the new administration and the policies that followed. This affected the economy, and hiring slowed early in the year as banks took a wait-and-see approach while they assessed the impact of the policy environment, although hiring became more active later in the year.

"Across investment banking, this effect was broad, although several sectors stayed active. AI-focused investment banking remained busy due to strong market demand. Financial institutions hiring also stayed active because the area is highly specialized and talent is in demand. Healthcare saw strong activity and energy also picked up, helped by a larger emphasis on traditional energy under the current administration."

What hiring challenges will the investment banking sector face in 2026?

"Slowdowns in economic activity affect the quality of talent available. Junior bankers who were not working on active mandates may not have gained the experience needed to step into new roles at a high level – banks hiring laterally want people who can make an impact straight away, and some candidates may have a skills gap. Firms will also set a very high hiring bar, which many candidates may not meet. Top candidates will have multiple offers, creating a challenge for firms trying to remain competitive for the strongest talent."

What are the hardest-to-fill investment banking roles in 2026?

"Sectors with specialized talent pools will be hardest to hire for, including financial institutions and healthcare. At the associate and VP levels, hiring will be particularly difficult. Banks have scaled back MBA associate hiring in recent years, so there are fewer associates in the market. Associate and junior VP roles are always challenging to fill, and that pressure will increase because of the smaller pipeline."

How should firms update their investment banking hiring strategy for 2026?

"Firms need to focus on their competitive advantage beyond brand name. During interviews, they should take the time to explain their unique selling points, competitive advantages, and strong deal pipeline. In terms of compensation, some firms are using sign-on bonuses, bonus buyouts, or bonus guarantees for top talent. 

"Culture is also a major factor. Associates and VPs want to meet peers in interviews to understand culture, mentorship, experience and collaboration. Bankers want to work in results-driven environments where they can have good exposure to deals and strong leadership so they can envision a long-term future, not a short-term stop.

"Selby Jennings advises clients on raising salaries, improving benefits, strengthening interview processes, and developing diversity and retention strategies. This helps diagnose attraction and retention challenges and provide solutions that bring stronger talent in the door and keep them long term."

How are candidate expectations changing in investment banking in 2026?

"Base salaries are staying consistent across lateral moves. The biggest change is in expectations around bonuses and sign-ons. Many candidates expect to have bonuses covered if they join a new firm. Top candidates want full coverage, while some expect a small or substantial sign-on bonus. They want to move into a stable situation where they are fully covered and not taking a financial hit, especially with current economic uncertainty.

"The top candidates can make these demands, but firms will only offer these packages to the strongest hires. Candidates who are capable but need more development will not receive the same terms, which creates a mismatch between expectations and what banks are willing to offer."

How will AI change investment banking teams in 2026?

"More banks want AI literacy as part of their team’s skill set as they use AI tools to improve efficiency – not reduce headcount. AI helps bankers work more productively, but firms still want people who can think strategically. In interviews, for example, bankers can usually tell immediately when case studies or presentations were created using AI. In M&A especially, firms need people who can think for themselves and provide solutions, not repeat AI-generated material.

"There is a difference between AI literacy and AI dependence. Ultimately, firms want people who can use AI to enhance their skill set, not rely on it so much that they lose their thinking capability."

Which investment banking tasks and processes are being automated?

"Some parts of investment banking roles are already automated. AI-supported virtual assistants help bankers manage hectic schedules, timelines and deadlines. AI tools also support workflows and processes, and can help create target lists for outreach or produce market research. These tools enhance workflows but do not replace core analytical work. Banks still want bankers who can run financial models and think through the analysis."

Which regulations will impact investment banking teams in 2026?

"The regulatory environment in 2026 is more relaxed than under the previous administration, and M&A deals face fewer hurdles. That reduces friction in completing transactions, although firms remain cautious about the long-term. They want to avoid becoming too fast and loose with regulations only to face changes later if a new administration reverses course.

"Restructuring will become prominent throughout 2026, as many companies struggling to meet financial obligations will need to restructure debt, refinance, or recapitalize. This will increase hiring in turnaround and restructuring consultancies, as well as demand for bankers specializing in debt advisory and restructuring."

What will be the biggest growth areas in investment banking in 2026? 

"Growth will continue in secondaries and private capital advisory, and this trend is expected to carry throughout 2026. We are also expecting growth in TMT, particularly for bankers focused on AI, data centers, and digital infrastructures."

Where are firms increasing their investment banking headcount in 2026?

"Hiring will be strongest at the associate and VP levels. Sector demand will be high in technology, financial institutions, healthcare, private capital advisory, secondaries, restructuring, and the energy and infrastructure space."

What investment banking compensation trends will impact hiring in 2026?

"Bonus season will heavily influence movement. Early feedback shows some banks have low bonuses, and many people are not thrilled with the numbers, although there are firms that will pay higher depending on performance. Post-bonus movement will be active, as bankers disappointed with compensation look for roles at firms with stronger results."

For the latest base salary and bonus benchmarks, download our USA Investment Banking Compensation Guide.

How should firms adjust investment banking pay and incentives to stay competitive?

"Total compensation matters most. Not every firm can match top Wall Street base salaries, so they must look at bonus structure, guarantees, or ways to bridge a first-year transition. Flexibility, vacation, paid time off, protected weekends for junior bankers, and strong retirement contributions are increasingly important. Firms that do not pay as high on base salaries need a comprehensive and competitive benefits package."

What’s causing investment banking retention challenges in 2026?

"Poor bonuses and uncertainty will affect retention. Turnover at senior levels or unclear leadership direction pushes people to consider leaving, as bankers want stability and long-term growth. Lack of clarity around promotion timelines also drives attrition. People want to know when they will be promoted and what compensation will look like – this certainty helps retention."

How can leaders reduce attrition risk and strengthen retention in investment banking?

"Leaders should understand individual motivators. Not every employee is driven by the same factors – some want more client access, others value travel, others want flexibility. 

"Spending more time on top performers is necessary. Leaders must decide who the business cannot afford to lose and allocate attention accordingly. Trying to treat every employee identically can weaken retention of the strongest talent."

How can leaders build stronger investment banking teams in 2026?

"Resilient teams need clear expectations and goals. People want to know what the outcome will be if they put in the work. Leaders should give attainable, measured goals, and individual plans help people understand where to focus and how to grow. 

"Clear expectations support stability, which is important during periods of economic uncertainty. Stability and clarity increase resilience and improve retention, even in difficult markets."

Speak with Brianne Sterling and the Selby Jennings investment banking team

If you are planning to expand your investment banking team in 2026, request a call back from Brianne Sterling and her team. As well as delivering the right talent for your needs, they can support with:

• Hiring strategy
• Market benchmarking
• Compensation insights
• EVP and interview process improvements
• Diversity and retention planning

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