February 11, 2010 – Simon Vaughan-Edwards is managing director and head of EMEA Global Markets for London-based Correlate Search. He began his executive search career in 1997 when he joined financial markets boutique, Stephens International. In 2000, he moved to Correlate Search, a specialist financial markets headhunting firm that works with a select number of banks, hedge funds, asset managers and insurance companies. Correlate was founded in 1994 originally as Alexander Mann Financial Markets and today the firm has offices in London, Dubai and Hong Kong. In the following interview, Mr. Vaughan-Edwards discusses growing demand for recruiting services, the current state of fees in the marketplace and his forecast for the year.
What can you tell us about the last 18 months vis-a-vis financial services executive recruiting in London?
Demand for our services has grown significantly since the early summer. We are now busy across all practice areas with activity levels stronger than they have been for two years.
Are you beginning to see demand build for 2010?
Demand for 2010 is continuing to grow. There are a number of ’business as usual’ requirements that are keeping us busy, however we are seeing considerable demand in the regulatory and control functions with strategic front office functions gaining shape for post bonus hiring. There has been less preemptive hiring for post bonus resignation, with houses unsure what the bonus pot will look like and the regulatory and government influence causing banks to adopt a wait and see attitude over significant additional headcount, concentrating on ‘business as usual’ hiring and plugging gaps caused by aggressive cutting in the previous two years.
What types of hiring activity are you seeing at the senior-levels?
Senior regulatory professionals (compliance, risk, COO) and in the front office senior professionals across all asset classes with value-added client relationships. In terms of geography there is considerable activity around all emerging markets, especially Asia, where most firms are hiring with a number of new entrants fueling what is a relatively limited the market.
Do you expect to see continued consolidation in the financial sector – and is there any negative impact this might cause to headhunting firms servicing this area?
On the contrary we are seeing the emergence of a number of smaller investment banks and boutiques looking to move into the gaps left by retrenching main stream investment banks.
What ramifications in the recruiting sector do you anticipate from the heavy focus that is expected to be put on tightening compensation packages for professionals in the financial sector?
Greater willingness for professionals from major houses to look at boutiques and partnerships and potential moves to more tax friendly environments.
There has been talk among your colleagues at other London-based recruiting outfits that clients have put enormous pressure on search fees — is this still true or is it beginning to ease a bit?
The pressure on fees has largely eased. Some houses are trying to move to limit fees on the larger base salaries – which in some houses are as large as £450k ($700k USD), but this is very limited as most see this as unsustainable.
What is your general forecast for 2010 — will we see growth or further stagnation?
Limited growth as houses react to returning markets and also look to plug gaps created by over-enthusiastic cutting.