Four years ago, at the height of the pandemic, banks hiked salaries over and over again. In America, analysts who were on $85k in 2019 ended up with salaries of $120k in 2021. Since then, times have changed.
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While salaries haven’t actually fallen since the heady COVID days, headhunters on both sides of the Atlantic say pay expectations have softened. And the new flood of people leaving HSBC has softened them still further.
“People who were on salaries of £160k at HSBC are accepting salaries of £100k from smaller banks,” says one London headhunter. Another says the people coming out HSBC’s M&A and equity capital markets businesses have flooded him with applications. Many are associates and vice presidents (VPs).
“There’s a sudden sense of realism about pay,” says Andy Pringle at recruitment firm Circle Square. “This was already evident last year, but it’s become even more apparent in recent weeks as HSBC people flood the market. People want new jobs at almost any price.”
It’s a similar story on Wall Street, where HSBC’s cuts included Alfred Traboulsi, the head of investment banking for Americas. Headhunters say many of those leaving HSBC have worked there all their careers and are emerging blinking into a still-challenged market. Bloomberg data says global M&A is down 23% year-on-year by volume; 2024 wasn’t exactly a boom period.
The new realism may be hard for bankers compromising on pay, but it’s good for the banking job market. Adam Zoia, CEO of US search firm Glocap, says a “new understanding” of compensation and working conditions was already permeating the market in the fourth quarter of last year and that more jobs were filled as candidates’ expectations finally matched employers’.
Zoia says realism on compensation is being accompanied by realism on working in the office. Early last year, he says there were “silly examples” of people refusing generous pay packages simply because they wanted to work from home. – “We had a role for an executive assistant at a fund on $180k base, but it was five days a week in the office and everyone we spoke to wanted to be at home.” JPMorgan’s very public hard line has helped change perceptions.
HSBC bankers who’ve been used to two days a week at home and to generous salaries may therefore have to embrace a harsher reality. In past rounds of banking job cuts, Pringle says unwanted individuals were slow to relinquish their pay expectations. This time, they’re jettisoning them almost immediately: “People seem more panicked,” he says.
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