It’s 2017. Some investment banks are cutting headcount, and some hedge funds are floundering. In such an uncertain market, making the move to pursue another opportunity could be risky. But many recruiters are optimistic that the financial services industry will see an uptick in hiring this year, and there are still reasons for pursuing a new finance job. Here’s how you should make the decision.
1. Don’t just move for money
Deciding to move for the opportunity to earn more money, or the promise of a bigger bonus (although guarantees are much rarer these days) isn’t wise. Eyeing up dollar signs can often blind you to the downsides of a new role.
“If you’re making the job change simply for money, then it’s probably not the right job, and I can almost guarantee that it’s not going to work out,” said Mitchell Peskin, partner and executive vice president in the financial services recruiting division at The Execu|Search Group.
2. Know which role you want and which company you want to work for
It’s easy to be swayed by a big brand name, or the possibility of a career switch into, say, a start-up hedge fund. But you really need to find something that works for you. It could be that you’re accepting a lower salary for a better platform and therefore greater bonus potential, or the promotion opportunities are simply more attractive.
“If you’re going to make a change, then you want to go to a better company,” Peskin says. “It should be for more money and more responsibility or a better job description, or a more interesting role, or a role where you can pick up additional knowledge that you didn’t have previously.”
The reputation of the company you are considering going to should be first and foremost. Is it an established household name with credibility or a startup nobody’s ever heard of? Is it a resume-builder? Bigger isn’t always better, but candidates should certainly size up the potential scope of the opportunity.
“One of the first things that needs to be considered is understanding what kind of banker you are – are you a cog in the machine or entrepreneurial?” said Cesar DeLara, senior consultant in the investment banking practice at Selby Jennings. “For the latter, go to a boutique or a middle-market [investment banking] environment, because you’ll get recognition and achieve career growth based on your personal performance, as opposed to the larger banks, where it can be more dependent on how your group or the firm as a whole did that year.”
3. Assess the stability of the new company
In the trigger-happy world of finance, it’s difficult to know when to make the right move. Something may appear to be stable, but this could turn around swiftly.
How to gauge a bank’s stability is a nuanced question since the financial crisis. By and large, the sell side is experiencing large secular changes that are being driven by regulation – proprietary trading desks are being shut down.
The onus is on candidates to do the research, said Reshma Ketkar, director and the head of the long-only investment professionals recruiting practice at Glocap Search.
“Take a look at fund performance over multiple years and investment cycles, comparing it to relevant benchmarks and peers when appropriate, investment team bios, top holdings and assets under management, looking at year-over-year growth,” Ketkar said.
It’s better to be an additional member of a growing team rather than the replacement for a team member who recently jumped ship or was fired.
“Making sure you’re moving to a growing platform is important, that is being an addition to a team rather than a replacement,” DeLara said. “If you’re the latter, be wary, because it shows the performance is bad or it means someone left the firm for another reason.
4. Realize when you’ve reached career stasis
It possible to be at the same employer for too long. This could, and should, be an impetus for moving. This is not as easy as it sounds – there are vast swathes of VPs and director level employees in investment banks who fail to make the step up to managing director – but switching jobs doesn’t have to be about moving up in rank. It could just as easily be about an opportunity to learn something new.
“Generally, where we are in today’s market, if you’ve spent 10 or 15 years at the same company, and that’s your one and only job out of school, then it could be looked at negatively if you haven’t shown progression,” Peskin says.
Sometimes you have to make a leap into the unknown in order to take the next step in your career progression.
“When I’m giving advice on whether a candidate should make a move or stay put, I concentrate on the platform and their long-term career goals rather than money,” said Mike Karp, the CEO of recruitment firm Options Group. “Does the position offer more responsibility – a broader mandate?”
5. Be wary of being perceived as a job-hopper
The tenure of financial services professionals in one organization averages out at five years. If your career is going nowhere in your current employer after this time, then it may be time to look for progression elsewhere. But there’s a flipside to this, of course, moving too often – layoffs aside – can be perceived as a big negative.
If somebody is job-hopping every couple of years, let’s say in the first 10 years of their career, then that’s going to be looked upon negatively. Hiring managers want to hire someone who will want to stay at their firm long term.
While two years is standard for a first job out of school, your second job should be a three-to-five-year stint, give or take, for gaining a solid base of on-the-job experience and serving as an effective stepping stone to further career success.
“At that point, if it’s working well, then you stay, but if not, then that’s certainly a good time to look for your third job,” Peskin said.
6. Don’t move finance jobs for FOMO
Sometimes people suffer from the “grass is always greener” syndrome, where they decide to leave a good situation because they have a fear of missing out (FOMO) or they believe a better opportunity is out there, even if that isn’t necessarily the case.
Millennials don’t seem to have tremendous loyalty to their employer, as Peskin said many are happy to move on to the next employer to earn more money – although that phenomenon certainly transcends any particular age group or demographic. However, he doesn’t think that’s necessarily a bad thing.
“You always need to be pursuing the next opportunity to keep your compensation current, work with new people and challenge yourself,” Peskin said. “If you stay too long, then you’re getting more experience in terms of years, but you’re not getting more experience in terms of knowledge or maximizing your earning potential.”
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