New York (CNN/Money) - Don't look now, but jobs may be returning to Wall Street.
After a multi-year slump that saw the elimination of more than 50,000 financial services jobs, experts say the industry is rebounding.
Rising stock prices and higher trading volumes have led to some of the best earnings performances at financial services firms in two years. Now, those companies are beginning to think about adding staff instead of cutting it.
"The weeding out process is over," said Rick Peterson, founder of Rick Peterson & Associates, a Houston-based recruiting firm. "Most of the office closings are behind us. Unemployment has hit bottom and job recovery will only gain momentum in the months ahead."
What's more, says Peterson, three years of layoffs have created an "empty desk syndrome" at brokerage houses. With the market's upsurge there's pressure to put some people back in those seats.
In June and July of this year, Wall Street firms hired more than 8,000 new financial workers, about one percent of total industry employment. And while preliminary figures from the Bureau of Labor Statistics showed a slight dip in August, many are predicting the expansion to resume.
"It's very early in the trend, but we expect it to accelerate through the year," said Securities Industry Association (SIA) spokesman George Monahan.
Retail revival
Monahan expects investment banking will play a strong role in the job recovery. In particular, he predicts much more activity in the mergers and acquisitions market, "which had been dead for the past few years."
Besides brokers and bankers, one of the strongest areas of job growth may be in tech services for Wall Street firms.
"Firms have been showing strong profit growth by getting by with fewer people, adding computers instead," said Peterson. But the more firms rely on high tech equipment, he noted, the more they need tech support workers.
Another flickering bright spot: investment research. Many small, independent firms have openings for analysts and support workers.
Moreover, when Wall Streeters are flush, other industries benefit, too.
Financial firms employ fewer than a million workers, but the jobs are among the best paying in the country. According to the New York State Department of Labor statistics, the average Wall Street salary is 10 times higher than that of the average retail worker, in a good year.
Outsized Wall Street bonuses get spent on real estate, as well as in restaurants, home-improvement stores, and car dealerships.
Of course, there is still a ways to go before the lost lustre is restored. On top of all the lost jobs, average earnings for financial services employees declined by 12 percent in the last two years, according to the SIA. Anecdotal evidence suggests the highest-paid were among the hardest hit.
More conversations
Though confident, not everyone on Wall Street is quite ready to schedule the ticker-tape parade.
One tentative observer is Joe Quinn, job market consultant for the New Jersey-based placement company Lee Hecht Harrison. "What we're seeing is many more conversations," he said.
Quinn believes that many of the big firms are gearing up their hiring plans -- "putting people on deck for 2004" -- but not yet acting on them.
Related Stories
|
|
|
|
Wall Street firms themselves are also acting cautiously. Many, for example, have upped their use of contract hiring.
Companies bring in people for three- to six-month, get-your-feet-wet assignments at a variety of industry jobs, from human resources to information technology.
It's a low-risk way for hirers to get acquainted with potential employees, a "try and buy," in Quinn's words.
Often, the contract worker will be offered a permanent position at the four- or five-month mark of a six-month contract. But if the investment industry's recovery fails to take root, those workers will be the first to find out.
|