The outlook for sell-side hiring on Wall Street in 2017

December 14, 2016 | efinancial careers

What does 2017 have in store for hiring on Wall Street? Doom and gloom, boom or somewhere in between? Recruiters give their views on sell-side hiring for next year in the U.S.

1. The hot investment banking sectors will continue to grow

TMT investment banking groups will be actively hiring next year, believe recruiters, with smaller banks bringing in senior-level people compete with bulge bracket players, said Brianne Toole, sales manager on the corporate and investment banking team at Selby Jennings. Energy investment banking groups are also likely to be hiring.

“People coming in looking for technology and power bankers – this year not a lot of people were added to those desks, because there was quite a bit of uncertainty moving into next year, but both tech and energy could see an upswing in hiring in 2017,” Toole said. “The outlook for renewables is still unsure, but it probably will not be as active as it has been.”

“Healthcare has been looking pretty strong, so that will likely be seeing more hiring as well,” she adds.

2. Expect boutiques to build

Boutiques have been eating more M&A market share from the large players this year and it’s likely that hiring will pick up next year, says Paul Webster, managing director and the head of North America at Page Executive

“Smaller M&A-focused boutique investment banks will experience more hiring activity next year, as M&A advisory and boutique clients expect deal flow to be up next year across TMT, fintech and also healthcare, including pharma and real estate investment trusts that invest in hospitals and managed-care facilities,” he says.

3. Rates traders could be hot

FICC trading revenues have picked up over the past two quarters, but as we’ve pointed to previously this is neither across all asset classes nor likely to lead to a significant reversal of fortunes for sales and trading employees in these divisions. But Dylan Pany, managing principal and head of the sales, trading and research team at recruiters Selby Jennings, thinks that the pending interest rate hike will be good for rates desks of investment banks.

FICC trading desks have been decimated over the past few years, but the pending interest rate hike is a good thing for certain asset classes, particularly rates, according to Dylan Pany, managing principal and head of the sales, trading and research team at recruiters Selby Jennings.

3. Small commercial banks will benefit from Trump

Paul Webster, managing director and the head of North America at Page Executive, expects Trump to encourage more lending to corporates and this will fuel hiring, but outside of the big banks.

“Under the new administration in the U.S., there will be greater encouragement for banks to lend to small businesses, below $110m in size and below 500 staff,” Webster said. “Such a push looks likely to benefit U.S. domestic banks, retail savings banks and regional banks, rather than global bulge-brackets.”

4. The pressure is on for wealth management hires to pay off

In wealth management, the large investments to hire teams need to be paying off by now, according to Carol Hartman, managing partner in the North American financial services practice at DHR International.

“If those investments are not paying off with AUM growing and margins improving, then you will see retrenchment on those platforms,” Hartman said. “It may be at the expense of products and services to clients, depending on the deals that were made.”

5. Project finance will be hot

Project finance headcount should be going up at banks next year, as Trump wants to make a big push in infrastructure. That will lead to an upswing in hiring, especially at foreign banks operating in the U.S., according to Brianne Toole, sales manager on the corporate and investment banking team at Selby Jennings, a recruitment firm.

Other recruiters agree.

“In capital markets, any firm without strong infrastructure and project finance bankers is missing a fantastic opportunity with the $500bn investment announced by the new White House,” Hartman said.

6. Trump could end compliance hiring boom

The demand for compliance and risk will continue in financial services, but not at the heated rate as the post-crash years, Hartman said.

Pany agrees, citing the fact that Donald Trump has talked about scaling back many provisions of the Dodd-Frank Act.

“You’ll see less hiring in some of the risk and compliance jobs in the business next year,” she said. “Our risk team here has been particularly busy helping larger investment banks to build huge risk and compliance teams, but if Dodd-Frank gets scaled back, I can’t imagine they’d need so much headcount.

“Instead, probably banks’ money-making businesses will be increased.”