An air of desperation can be felt in the coffee shops of the City of London and in some of the suburban homes of the financial recruits and headhunters they used to frequent. We are in the fourth quarter and 2020 has not been a good year for many. Large hedge funds have closed; As did the loan trading teams, but elsewhere in the London hiring market the lockdown began and never really ended.
“It was hard – I really have to work on it and call people I haven’t spoken to in a while,” says a headhunter in the theoretically hot area of systematic trading on the sales page. “It was easy enough to complete existing mandates, but it is very difficult to get new business without meeting face-to-face.” Another macro headhunter says it’s “ok” but “super quiet”. – “I made a few adjustments,” he adds, without clarifying the timeframe in which they happened.
Some in London are optimistic – one headhunter says things are gradually “coming back” and that if only banks make up for their underperformers – as seems to be the case now with the likes of Goldman Sachs, recruitment will return. “A lot was done over the next year,” he says. “2021 could actually be very strong with cuts and bonuses out of the way.”
For now, however, recruiters still have to stick to their budgets. And with Brexit on the horizon, many are concentrating outside the city: Paris and Frankfurt are the new Cornhill and Canary Wharf.
As Europe returns to business, it has not gone unnoticed in French and German financial circles that London is still deserted. “I’ve never seen the neighborhood so calm,” London headhunter Piers Benbow told Le Monde this week. “People didn’t really come back after the lockdown. I have clients in asset management who even have to ask for permission to go to the office.”
In comparison, things are almost back to normal in Frankfurt. “80% of the people are back in the office”, says a headhunter of the British capital markets, who moved to Frankfurt over a year ago. He attributes the normalization to high-tech COVID test stands that are dotted around the German city, including one that serves coffee while you wait for the result: “We only test every Monday or Friday.” The federal government also sends messages informing residents about the COVID risk: “Today we have a message that there are 9.1 cases per 100,000 cases in Frankfurt and that we are free to run our business.”
In these circumstances, more and more London recruiters are looking over the parapet and realizing that Europe could be an easy place to make money. “With the upcoming Brexit we are concentrating again on Paris and Frankfurt,” says a London macro headhunter. “It’s easier to get things out there.” Three other headhunters (all speaking confidentially) emphasize the same thing. It is helpful that Paris, for example, has already attracted 4,000 banking and asset management jobs due to Brexit, according to estimates by the local trade organization Paris Europlace – which leads to forecasts that up to 20,000 additional support functions could follow.
The two European cities are already served by their own local recruiting industries, but the strength of the London headhunters lies in their ability to find Europeans in the city who may be prepared for migration. Banks like Goldman Sachs have moved employees from New York to Frankfurt, suggesting that there may also be a trade in transplants from Europeans across the Atlantic.
According to a recruiter, the Germans in London are the hottest ticket: “Nobody but the Germans want to move to Frankfurt,” he says. In comparison, it’s easier to convince Brits, Italians, Spaniards and even Dutch to Paris, where they can potentially use the Eurostar to commute to and from London.
At least that’s the theory. JPMorgan insiders say there is some fear among the 100 or so sellers expecting to leave their families in London when they move to Paris in December. Although the UK government currently has an exemption from the quarantine rule for people entering and leaving France on a weekly basis, there are fears that this clause could go away in either the UK or France after Brexit. “People say they won’t go to Paris because they fear that they won’t be able to come back and see their children,” says one headhunter. “And that gives us the opportunity to fill these roles with someone else.”
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