Working Wall Street: Jobs rebounding
Securities firms create 10,000 positions in June

By Jackie Cohen, CBS MarketWatch.com

SAN FRANCISCO (CBS.MW) -- The securities industry created about 10,000 jobs in June, bolstering a recovery that to date has recouped nearly half of the jobs lost during the economic downturn.

The workers in greatest demand include compliance officers, credit derivatives specialists and supervisory analysts, along with administrative, technology, operations and accounting staff.

"We're seeing about 3 percent to 3.5 percent employment growth this year," said Frank Fernandez, director of research at the Securities Industry Association.

The U.S. Labor Department pegs the number of positions in the industry at 790,000, right at the halfway mark between the last peak and the more recent nadir. Employment peaked in March 2001 with 840,900 positions at securities firms, and bottomed out in May 2003 with 757,000.

Staffing levels tend to lag the market's performance by at least six months, so the latest hiring rebound is right on time, added Fernandez.

However, "job recovery is happening across the country and in different departments, but not as much in New York City," he said. "The highest compensated jobs are staying in New York, but what we're losing from the area are the jobs that don't cost enough to justify the occupancy expense."

These geographical shifts are the fruits of a changed legal landscape. In 1999, legislators knocked down the firewalls that had once separated commercial banks, brokerages and insurers.

The resulting rash of mergers and acquisitions put many Wall Street firms into the hands of commercial bank owners located outside of New York, where the overhead is much lower. That's part of the explanation why the rebound in financial employment is more visible off Wall Street.

Among the first to get hired -- or fired, during a slowdown -- are those who work on commissions, especially brokers. "They're easily hired and fired, and have high turnover," said Steve Testerman, president of BrokerHunter.com, a financial services recruiter based in Cumming, Ga., an Atlanta suburb.

For similar reasons, Testerman sees continued opportunities for independent contractors and outsourcers. Such "third-party" firms have been absorbing some of the 60,000-odd people who've been laid off by securities firms.

Among third parties and securities firms, "accounting is huge. We're going through a massive overhaul of our records because of new laws," said SIA's Fernandez. "We've been burned by accounting failures, so chief executives no longer want to accept just one point of view. They'll hire two outside firms, one to do the audit and one to check the audit."

Another area of demand is for prime brokers, or sell-side firms that transact with and act as service bureaus for hedge funds, doing everything from portfolio valuations to extending credit.

A telling sign, however, is the comparative dearth of opportunities for research analysts and investment bankers. "The IPO rebound hasn't been strong enough yet," added Testerman of BrokerHunter.com.

But "every year, people get fired in the business, so there's always an inflow of new talent," said Peter Degnan, director of MBA career management at the Wharton School of Business at the University of Pennsylvania. "Some of my counterparts at other business schools have seen more of a falloff in investment banking."

Investment banking continues to be the job of choice among Wharton graduates, according to Degnan: "So far from the class of 2004, we've placed 142 students in investment banking -- and this data isn't complete because we're still placing people from that class. For the class of 2003, we had 112 students go into investment banking; in 2002, there were 120 students and in 2001 there were 175 students."

Even for the not necessarily elite, the hiring rebound is expected to continue, although staffing may not return to peak levels anytime soon. Blame it on productivity, which securities firms have increased by sevenfold over the past 25 years, said Fernandez.

Productivity also creates new opportunities, though, and many of them await entrepreneurial types. The SIA expects that the industry will continue to see more investment advisers setting up their own practices, particularly outside New York.

Job movers: Giving credit experts their due

Richard Steen, senior partner in charge of Wall Street recruiting at Korn Ferry, is seeing huge demand for credit derivatives specialists, including a flurry of such hires in New York.

Barclays Capital hired John Lovisolo as a managing director and head of product development in the structured business; Lovisolo was previously senior product manager for the structured credit business at Deutsche Bank in New York.

Blue Crest North America has hired Jeff Burch to do credit portfolio management and Ashish Misra in risk management. Burch was a principal in the structured trading area at Bank of America in London, while Misra was a senior quantitative strategist at Morgan Stanley.

Merrill Lynch Asia recruited George Sun to head up the collateral debt obligation business; he comes from Moody's.

Nomura has hired George O'Dowd as managing director and head of the New York credit structuring group, and Eric Langille as director and co-chair of credit flow trading. O'Dowd hails from Commerzbank's structured trading department; Langille was a head of trading at Bear Stearns.

Royal Bank of Scotland tapped Ramita Shetty, former head of the collateral debt obligations group at JP Morgan, as well as Sanjeev Gupta, former head of global credit derivatives at CS First Boston. In their new positions, Gupta will run the U.S. credit trading operation and Shetty will co-chair the structured credit business.

Rabobank hired Frank Frishberg to help run the global structuring and portfolio management group; he was formerly with the structured credit group at Deutsche Bank.

Changing jobs? Got a vacancy to fill? Have a workplace story to tell? Send all of your employment news to jcohen@marketwatch.com.

Jackie Cohen is a reporter for CBS MarketWatch in San Francisco.