“The harder you work, the luckier you get.”- Plato
The Covid-19 pandemic has had a far-reaching effect on society, with employment and education being structurally impacted to a degree that will echo for some time. In the UK unemployment is at its highest level since the 1980s, with over 3.3 million active job seekers, and graduates now face the challenge of securing their first step on the career ladder during a period of social distancing and working from home culture.
The summer months are traditionally the most active period in the recruitment cycle, as students enter the workforce. For the financial sector, the graduate intakes embark on their associate programs, as well as the summer intern programs for under-graduates, designed so that employers have the opportunity to identify talent for the following year.
This year is proving particularly challenging for graduates who had secured placements ahead of the lockdown. Many of the leading banks have either cancelled their summer programs outright or moved to delivering a web-based training schedule. The online forums, such as Wall Street Oasis, are a buzz with posters sharing information and voicing expectations. The anxiety of these incumbents is evident, even though many of the banks have now clarified their position.
Buyside Hiring
The impact on hedge funds is also evident. Compared to the private equity and family offices, hedge funds hires have significantly slowed in the past 4 months. As uncertainty in the market and asset base has increased, hedge funds have taken a cautious turn in the hiring process.
One London based headhunter has confirmed that hedge funds are ‘twitchy’ about fully committing to front-office hires, with probation periods being increased to six months, from the typical three. There is also evidence that commitment to full-time positions has been impacted, with many of those offered employment ahead of the pandemic being reorganized to ‘internships’. One exception to this is the quant space. Duncan MacKay, of the Sartre Group, notes that top-quality PhD level hires into the quantitative analytic arena remains buoyant.
While the front office hires are on hold, there remains interest in taking on operations and technology roles. As businesses adapt to working from home, structural weakness in these areas have become apparent, which is forcing firms to fill these gaps, ensuring middle and back-office services continue to support the front office activities.
For those still hiring, the process of securing talent is changing. The traditional face-to-face interviews are being replaced by video conferencing. Though this application of technology is not new in the interviewing process, it has typically only been applied in the early stages of the recruitment process. Now firms are faced with the dilemma of pushing forward without direct contact or waiting until social distancing measures are relaxed to a point an in-person interview is possible.
How long this cycle will continue is unclear. Reflecting on the financial crisis of 2008, the impact on job market reverberated for a decade. This time around, however, the job market is likely to rebound quickly as the structural integrity of the market was better placed heading into the crisis. Furthermore, government schemes supporting businesses directly through loans and furlough schemes have provided some economic relief.
Like other firms, Quay Partners sees this period as opportunistic. While the supply of potential recruits remains intact, and demand in the doldrums, the possibility to recruit the best talent has improved significantly.
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Quay Partners Group delivers bespoke investment management solutions to independent hedge fund managers and family offices.
Thomas Underwood, the Founder, has over 20 years’ experience in managing and operating hedge funds.