Junior Investment Bankers in Demand As People Quit, Banks Race to Hire

• Investment banks are seeking backup as they struggle to retain junior staffers.
• High rates of attrition and fierce competition is sparking a talent war for young bankers.
• Recruiting firms are racing to poach junior bankers, and one has formed a dedicated team. 
• See more stories on Insider’s business page.

Wall Street is racing to recruit reinforcements to bolster its junior investment-banking ranks after months of rapid-fire deals.

Goldman Sachs and JPMorgan are among the bulge-bracket banks that have recently vowed to bring on more people. Goldman CFO John Waldron said earlier this week the firm was caught off guard and “under resourced” after deal volumes surged in the second half of 2020 and earlier this year. “I wish we had done it sooner,” he said about the bank ramping up hiring. 

Some headhunters say that they too are bringing in reinforcements to accommodate banks’ hiring needs. 

At Bay Street Advisors, a boutique financial-services industry search firm, partner Kevin Mahoney told Insider that his firm has set up a designated internal group, which he called a “SWAT team,” to focus almost entirely on hiring associate and VP-level placements (which are considered junior- to mid-level) in investment banking.

Mahoney, who heads the firm’s investment-banking, private-equity, and private-credit practices, said that the new group is composed of about five full-time hires, three of whom have joined the firm just in the past year. Two additional director-level recruiters help to oversee the group’s activities.

“It started off as hiring reinforcements, adding headcount,” Mahoney said about the banks’ activity. “Somewhere around two months ago, it really became more of replacement hires, dealing with attrition.”

In fact, Mahoney said, one large-cap bank that his firm recruits for is in the process of hiring for as many as 15 junior to mid-level bankers — five are replacement hires to fill vacant roles, and 10 are new roles that didn’t exist at the bank before.

“In the past month, they’ve lost 10 people,” he said, “which is not included in that headcount number.” He declined to name the bank. 

The tug-of-war between hiring demands and the revolving door is creating challenges for big banks. They’ve been doling out retention-focused incentives like special bonuses and raises while trying to lure new talent altogether.

“There’s, frankly, just not enough bodies in the market,” Mahoney said.

Juniors at investment banks across Wall Street are under siege

Many young bankers are struggling to keep their heads above water, with some hoping things will improve once they’re back in the office and can enjoy some camaraderie.

Others are throwing in the towel, opening up vacancies in firms’ ranks — and banks are having to get creative to fill them. 

Mahoney saw the first signs of trouble toward the latter half of 2020. Deal volumes, which slowed early on in the pandemic, rebounded in late summer.

By the fourth quarter, almost all sectors were marching forward, he said. The dealmaking has been nonstop, pushing some big banks to record first-quarter performance at the start of 2021.

“As we approached year-end last year, banks were saying, ‘We need to hire more people. We’re going to be super busy going into next year.'”

By February,  juniors’ patience with the blistering pace was wearing thin. Working from home in solitude didn’t help matters, and many pursued other paths altogether, he said.

Goldman’s push to hire to hire more juniors comes after two leaked analyst presentations showed how analysts were pleading for support since WFH began. 

UBS has said that it is “actively recruiting” for additional juniors, in a memo…