- Business Insider recently compiled a list of the top headhunters on Wall Street age 40 and under, and we asked many of them about the greatest concern facing their industry.
- Many mentioned the impact tech and Silicon Valley was having on their business and Wall Street at large.
- On one hand, platforms like LinkedIn have encroached on their turf.
- But many have also noticed top candidates flocking to tech companies instead of investment firms.
Business Insider recently compiled a list of the top headhunters on Wall Street age 40 and under, and in the process we asked many of the candidates the same question: What’s your biggest concern about the industry?
One theme came up over and over again, and it’s a concern that’ll be familiar to many: How Silicon Valley is changing their business.
“It’s disruption. Everyone’s trying to disrupt our business,” one recruiter told Business Insider.
They went on to explain that, for example, LinkedIn’s arrival had significantly impacted their many-decades old business, especially for recruiting mid-level finance positions that earn below $225,000.
“LinkedIn has been devastating to that mid-level,” they said, adding that they anticipate more technology platforms to exacerbate the problem going forward. “It’s not about if, it’s about when.”
Another headhunter echoed that sentiment: “If you’re just looking to fill mid-level jobs, that’s totally going to go away.”
Higher-level recruitment searches – where candidates may not even have a LinkedIn account and aren’t necessarily looking for a job – aren’t exposed to such risk.
“People pay us to change the mind of people who aren’t clicking on a job ad and aren’t looking,” one senior-level recruiter said. “It takes a very human skill set. “
But it’s not just the direct assault that tech is having on recruiting.
Silicon Valley has been shaking up the finance world in general, indirectly changing how recruiters approach Wall Street.
On one hand, Wall Street – and banks in particular – has been suffering a talent flight away from investing and toward Silicon Valley and start-up world.
One headhunter told us that they’ve seen a “decline in the talent pool” and “less interest in investing.”
“The smartest kids are going instead of to investment banking to tech startups,” they said.
Another recruiter cited “the draw of big tech companies” as one of their biggest hurdles.
“That’s why we work on more and more corporate development roles at those tech companies,” they added.
Additionally, banks have embraced tech, feverishly adopting automation and machine learning technologies to cut the costs of business. Swiss bank UBS has taken steps to automate trade allocation, and JPMorgan has launched and expanded a predictive recommendation engine to identify those clients which should issue or sell equity, among other ambitious tech projects.
McKinsey & Co. estimates that these types of technologies could have a sizeable impact on 60% of bank jobs.
Recruiters haven’t started representing robots and algorithms, so those are lost jobs that headhunters can’t recruit for.
Of course, Wall Street banks have already massively scaled back their trading operations in recent years as revenues from fixed-income and equities businesses have declined, so this isn’t an entirely new problem.
“A lot of the industries and particular jobs where that’s going to be really invasive and ultimately cannibalistic, it has already happened,” the senior-level headhunter told us.
But, Wall Street jobs where an algorithm can’t readily outperform a human – relationship- and trust-based jobs like investment banking – aren’t going anywhere any time soon.
“We’re aeons away from that being replaced,” the senior-level headhunter added. “There’s no algorithm that thinks up and creates the CVS-Aetna deal.“