Wall Street ramps up hiring as profits return

Wall Street is hiring again. Among those in demand: traders of exotic financial investments such as derivatives, and risk managers whose job it is to keep companies from repeating the reckless bets that imploded and nearly toppled the financial system 18 months ago. The hiring rebound is modest. It has yet to show up in government data, and the most recent jobs report actually showed a slight drop in the number of financial workers in March. That suggests the number of job cuts is still surpassing new hires. Yet firms that specialize in financial employment and compensation consulting say demand for top talent is rising, and that companies are dangling lucrative pay to attract key people. At eFinancialCareers.com, an employment firm for the financial services industry, employers posted openings for 1,508 jobs as of April 1 — up 34 percent from a year ago and the fourth straight monthly increase. The search for talent comes as a resurgent stock market and a river of federal aid have allowed the nation's biggest and most troubled banks to return to profitability and begin replenishing their decimated work forces. Modest or not, any hiring is good news for New York's starved coffers. About two-thirds of the jobs posted at eFinancialCareers.com are in the New York City metropolitan area. The pickup in hiring could also foreshadow a turnaround in the wider economy. "Historically, hiring on Wall Street has recovered before the rest of the economy," said Richard Lipstein, managing director at Boyden Global Executive Search, which works with many top financial firms. "Higher stock prices increase the value of companies. That leads to more initial public offerings, more advisory work and more hiring in general." During the first three months of the year, U.S. financial firms announced 3,880 hires — up 13 percent from the same period in 2008, according to employment firm Challenger, Gray & Christmas. The actual number may be higher because not all companies publicly announce every new hire. It's a big turnaround for an industry on the verge of collapse less than two years ago. Financial services firms shed 415,000 jobs in 2007 and 2008 as the nation's biggest banks lost billions of dollars, according to Challenger, Gray & Christmas. Citigroup Inc. alone cut 75,000 jobs. The number of financial job cuts fell to 51,000 last year and is on track to fall again in 2010. The layoffs have come at a heavy cost. New York state Comptroller Thomas DiNapoli has said financial services job cuts could cost a combined $6.5 billion in lost tax revenue for both New York City and the state. The comptroller's office said it's too soon to know how much the latest round of hiring will help offset that loss. "There's some encouraging signs, but it's not the sustained hiring that we expect," said DiNapoli spokesman Robert Whalen. And few expect a quick return to the hiring spree of the boom years. The last year that financial services firms had a net increase in hiring was in 2007, when jobs peaked at 6.2 million nationwide. That's about 10 percent higher than current levels. Some of the most aggressive recruiters lately have been the banks hardest hit during the credit crisis — including Citigroup and Bank of America Corp., compensation consultants say. Those firms were restricted from paying top-dollar salaries and bonuses after taking billions in government bailout money. They've since repaid the funds, freeing them from the restrictions. "They're back in the game," said David Schmidt, a senior consultant on executive pay at James F. Reda & Associates. Bank of America declined to give specific numbers on recent hires but said it's recruiting across the big bank's global operations. "We continue to see great enthusiasm from candidates who want to join our firm," Bank of America spokeswoman Kelly Sapp said. Citigroup spokeswoman Danielle Romero-Apsilos said "recruiting the best talent has always been a priority" for the bank, which also declined to give specific numbers on hiring. Increased demand for talent has helped boost Wall Street bonuses, which climbed 17 percent to $20.3 billion in 2009. And more people are getting bonuses, too. In a survey of 850 financial workers, eFinancialCareers.com found that 92 percent got bonuses for 2009, up from 79 percent the previous year. But the money wasn't divided evenly. Nearly half saw their bonuses double. For the rest, bonuses stayed the same or were cut in half. "Compensation is up across the board, but you're seeing a bigger spread between those who are performing well and those who aren't," said Constance Melrose, head of eFinancialCareers.com North America. The return of Wall Street hiring doesn't mean landing a job is easy. With hundreds of thousands of financial workers still out of work, competition is fierce. And firms are being choosy, seeking out experts in lucrative areas like trading of distressed debt, derivatives and bonds, said Jeff Vistithpanich, principal at Johnson & Associates, a financial services compensation consulting firm. "The people getting jobs now are the ones with specialized skill sets," Vistithpanich said. "The philosophy (at banks) is, 'Let's replace three people with one highly skilled person.'" Another in-demand Wall Street job: risk managers. They're in charge of monitoring banks' daily activities to ensure companies don't wager too much of their own capital — a routine task many large firms were accused of neglecting in the prelude to the credit crisis. "Risk management has certainly gotten much more important," said Lipstein of Boyden Global Executive Search. "We're seeing those positions being created in the upper echelon of Wall Street firms. They want to avoid what happened before."