As we’ve moved to virtual work, we haven’t just coped, we’ve actually thrived. We are making quicker decisions and acting. Meetings are now more inclusive of people regardless of location, level or other differences. We have great momentum and need to figure out how to carry it forward.

– Suresh Kumar, CTO at Walmart

Many of us are now considering aspects of post-pandemic life. At Odyssey, a key area of interest is the future state of work and hiring, and whether aspects of the talent market have now changed irreversibly over the last 18 months. As businesses everywhere navigate the beginning of the end of the pandemic, in this Newsletter we dive into two aspects of this of this unprecedented era. The first is whether hiring interviews will continue to be conducted over Zoom when we return to the office. The second looks into investment industry migration to Florida. How much of this has been a virus-driven, temporary phenomenon that’s just going to snap right back to where we were? Or is this perhaps the start of a longer shift of firms and talent outside of New York and the other major markets now that the primacy of physical presence has decreased?

Reflecting on these past few months, not only have we been dealing with the challenge of remote working, but it’s been a remarkably active period of hiring. There’s a competition for junior talent at a level not seen for over a decade. We’ve found that typical recruiting timelines have been cut in half – a hiring process that typically takes three to four months has lately shrunk to one to two months (or less). This is being driven by both buyside demand (boosted by high asset levels, good performance, having excess capital to deploy) and the uniqueness of the remote working environment. Candidates are evidently more willing and able to conduct job interviews from their couch, and have much less concern resigning remotely to a boss they haven’t seen in person for a year. As firms vie aggressively for top talent, offering competitive compensation is part of that strategy. Inflation is all over the news these days, and that’s certainly the case for investment banker pay. Bank of America announced it’s increasing the base salaries for its investment banking Analysts by $10k, and for its Associates by $25k. At Guggenheim, the base salaries have been raised so that now the starting base salary for fresh college graduates is $100,000. The Analysts, Associates, and VPs at William Blair all just received a special, one-off bonus of $20,000. On the Private Equity side, Warburg Pincus announced it’s increasing PE analyst and Associate pay by up to 30%, and Apollo is reported to be paying its Associate’s additional retention bonuses of $100k to $200k if they stay through fall 2022.

But money is only one of the ways to address this attraction and retention issue. We’ve seen some of the savviest investment firms recognizing the change in the power balance with candidates and altering their hiring approach. They are “selling” all the way along the process, even while they are interviewing. The old approach of grilling a candidate, not giving feedback, not developing a rapport, and then expecting a gratefully accepted offer leads to disappointment these days. Now, with firms about to ask employees to return to the office, we expect even more people to start looking for new opportunities.

We’d be happy to discuss to more of these retention and hiring approaches with you. We don’t claim to have all the answers – but we do recognize that these questions are changing faster than ever.

The Odyssey Search Team