In this analysis on the nature of the current work environment in the capital markets, industry experts agree that professionals should get comfortable with a virtual environment because it’s here to stay for a while, and even when (and if) professionals migrate back into offices, capital markets professionals may discover they prefer this culture of flexibility that wasn’t present before the pandemic.
In 2020, the nature of work changed tremendously, and possibly forever. The COVID-19 pandemic swept the globe, inflicting rampant unemployment and economic devastation. The new normal created numerous struggles from a hiring perspective, from the unique challenges of sourcing and evaluating talent in a remote environment to the difficulty of filling in-person positions due to the risk of infection and candidates’ reluctance to relocate for those jobs.
The capital markets and institutional fintech space experienced its own unique obstacles in navigating this disruption. While the sector was certainly more fortunate than many industries, 2020 still saw record job losses at institutions like Citigroup and HSBC, and numerous fintechs faced existential challenges. All of this occurred amid a backdrop of unprecedented market volatility, overall economic turmoil and a health crisis that threw the future of work into a state of flux, complicating the process of identifying and addressing personnel needs.
However, as has been the case in many areas throughout the pandemic, it’s not all bad — just different. Despite market-wide unemployment rates that soared in the early spring and then subsided as the economy found its footing, the U.S. Bureau of Labor Statistics last month reported that the number of available jobs increased to 6.6 million openings in December. In addition, a report by global recruiting firm Sheffield Haworth found that there were 251 managing director-level hires at investment banks last year, and that some groups, such as asset managers and boutique banks, significantly increased headcount. These openings suggest the continued importance of recruiting well-matched talent and adapting longstanding practices to meet the moment. To some, they are a welcome reason for optimism.
“At the outset of pandemic, we did not expect that much hiring would occur, if any,” said Jim Toes, President and CEO of Security Traders Association, a trade organization that serves individuals employed in the financial services industry. “We were wrong: hiring did occur. Despite the very real and unique challenges that still exist today, our industry has remained tremendously resilient and flexible throughout the pandemic, and that extends to its staffing practices.”
Remote Possibilities
In February 2020, just before the mass COVID-19-related shutdowns, a McKinsey & Company survey found that 87% of executives said they were experiencing skill gaps in the workforce. In fintech, the pandemic had little effect on hiring rates, but according to several industry executives, significant gaps in talent persisted across the sector. The pandemic and the subsequent upheaval of the traditional office space threatened to exacerbate this issue.
For many hiring managers, the first and most pressing COVID-19-related change has been the restructured training process. Before the pandemic, new employees had the opportunity to undergo hands-on, in-person training. Now, they miss out on this immersive experience, and managers must rework training curricula to facilitate a remote onboarding process.
“Training is one area where an office provides an advantage over remote working,” said Stino Milito, Co-Chief Operating Officer of DASH Financial Technologies, a U.S. options technology and execution provider. “Newer employees being able to easily talk, listen and learn from senior colleagues is critical to their development and it is more difficult to accomplish right now.”
The virtual workplace also hinders the hiring process. Hiring managers agree the lack of in-person interaction makes it difficult to understand the candidate’s personality, motivations and qualifications.
“Without having that ability to feel the vibe and experience the person in real-time, face-to-face, it leaves you lacking,” said Brad Hoyda, President of Winston Search Advisors, an executive search firm for the fintech and marketing sectors. “There’s a greater level of risk that you take on because you don’t have that ability to shake a hand.”
Team integration and culture development can also be a challenge in the current environment, notes Erica Avitia Marquez, COO at quantitative market maker Old Mission.
“We’ve grown significantly over the last year, but many of us have never met in person. We’ve held speed networking events and have used Uber Eats to do virtual dinners and drinks, but it’s hard to replicate the organic relationship building that happens in a normal office setting,” Marquez said.
Eric Einfalt, Chief Strategy Officer of Eventus, a provider of trade surveillance and market risk solutions, argues there are pros and cons to this new normal. Despite the occasional technical challenge associated with the world’s transition to entirely virtual communication, Einfalt said that conducting video meetings from home tends to humanize coworkers and job candidates in a way that wasn’t possible before the pandemic.
“You get to know people a little better,” Einfalt said. “With video calls as the new standard, you can connect with people ‘face-to-face’ all the time now, whereas historically a voice-only call was the norm. It has presented an opportunity to really understand what makes them tick … not just as professionals, but who they really are.”
For most companies, the eventual return to work is uncertain and may take on a hybrid model, necessitating a diverse array of adaptations. While many in the industry are eyeing a fully virtual future, others, such as traders, will likely return to a largely in-office setup. But for those who do make a permanent or semi-permanent switch to remote work, a virtual office space offers new opportunities for both hiring managers and a diversified pool of job candidates.
“Now that we’re no longer bound by the constraints of a single geographic location, it’s allowed us to connect with interesting and diverse talent, wherever they may be,” said Barry Rindenow, Director of Recruiting at MayStreet, a market data software infrastructure provider. “In many ways, finding great talent has never been easier.”
Hiring managers aren’t the only ones who have adapted; jobseekers’ processes and preferences have also changed due to the pandemic. Industry leaders agree people are more likely to prioritize job stability and name recognition in their searches.
“Candidates are now paying more attention to the stability of the company when looking for a job,” said Karoline Raets, Executive Vice President, Head of People Office at Itiviti, a trading technology provider. “They are less inclined to change [jobs] for a startup or a company without a strong name in the market.”
Culture Shock
From a cultural perspective, the transition from in-person work to indefinite work-from-home took its toll. According to a Reuters story on the investment banking space, while virtual meetings and remote due diligence proved possible, industry veterans voiced concerns that they could ultimately result in firms losing their competitive edge, particularly those with a large number of younger bankers who would lose the ability to build relationships as their more senior colleagues had. Some bankers also expressed anxiety to get back to in-person meetings and dinners with clients.
In order to maintain a semblance of the industry’s pre-pandemic culture, hiring managers have reevaluated the skills and qualifications they prioritize in a candidate.
“Candidates need to have a certain level of proactivity at work as everything happens remotely,” said Raets. “New joiners need to proactively raise up what they need or what problem they are facing.”
These managers also emphasize attributes like strong communication skills, methodical time management, a willingness to collaborate and demonstrated interest and experience in the given field. In short, if candidates want to secure a job during the pandemic, they must be independent, impressive and proactive.
Firms are also curious about candidates’ extracurricular interests, according to the STA’s Toes.
“All of us have had to reinvent ourselves to an extent amid the pandemic, and employers will want to know what candidates have been up to,” Toes said. “What are candidates doing to recognize that the hiring landscape has changed and to refine their skills accordingly? These can be relatively simple things — maybe you became a Zoom expert or took an Excel course.”
The recruiting and staffing processes have experienced a larger structural shift over the past few years, Toes said. Headhunters and recruiters now work for companies looking to hire, as opposed to individuals seeking jobs.
“This model has always existed, but it has become even more prevalent amid the pandemic, and the jobs they are looking to fill often are not posted anywhere,” Toes said. “These recruiters are going onto LinkedIn performing searches based on a number of criteria, and jobseekers should seek to make themselves easy to find.”
If jobseekers wish to reach recruiters, Toes recommends candidates optimize the searchability of their work and social media profiles.
Hoyda suggests candidates conduct networking calls and emails early in the morning or after workday hours for maximum response rates.
“My advice to people is [network] extremely early, well before 8 a.m.,” Hoyda said. “Later in the evening is also a valuable time to get someone’s attention. It’s all about getting attention at a particular point in the day when they’re not focused on 160 different emails.”
But for Hoyda, the most important quality of a successful candidate is intangible and can’t be improved through a stronger social media presence and early emails: authenticity.
“When you’re authentic, you’re comfortable with what you’re conveying and how you’re conveying it,” Hoyda said. “As a recruiter, you’re looking for authenticity by way of their legitimacy, and legitimacy is not just part of a resume but the story behind an individual’s career.”
Bridging the Gaps
Strong communication networks, solid management and authenticity aren’t just essential traits in a candidate — firms need to uphold these values as well. From the outset of the pandemic, companies have experimented with practices to help remote candidates navigate unfamiliar hiring processes.
Industry leaders cite the importance of recreating the geniality of the in-person workplace. With tools like casual Slack channels and Zoom happy hours, firms can attempt to replicate the pre-pandemic watercooler banter and luncheon chatter.
In the case of Itiviti, Raets said the company implements a set of specific initiatives to simulate the intimacy of in-person interviews and onboarding processes.
The company schedules specific time slots for future team members to ask questions of managers, conducts virtual office tours and company presentations and creates a virtual “personal” space for the candidate, a friendly and relaxed environment where candidates can learn about the company and share relevant details about themselves, Raets said.
In virtual interviews, Hoyda said he tries to ask candidates more open-ended questions to prompt candid, unscripted answers and to learn more about the candidate’s nature.
“I find that silence is a good tool to use,” Hoyda said. “It can be uncomfortable for some, but it allows for the person you’re speaking with to fill in the space with their value.”
Potential Lasting Impacts
Many sectors will feel the reverberations of COVID-19 for years to come. Industry experts agree that professionals should get comfortable with a virtual environment because it’s here to stay for a while, and even when (and if) professionals migrate back into offices, capital markets professionals may discover they prefer this culture of flexibility that wasn’t present before the pandemic.
In September 2020, a Morgan Stanley survey found 27% of employees would happily work remotely for three or four days a week even after the pandemic subsides. Hoyda suggests the drive to get back into a traditional office space may vary across generations.
“Millennials are champing at the bit to get back into the office,” Hoyda said. “People with more seniority are perhaps not as eager to get back.”
Hoyda said he also expects communications, public relations and fintech companies to experience massive growth during and after the pandemic.
While industry predictions vary, leaders agree a fundamental shift has occurred, making one thing clear: hiring will never be the same, and the future of work has already arrived.