Dotcoms, of course, lack the appeal they had a year ago, and Goldman has stated it will be cutting back on new hires this year, but recruiters are divided on the riskiness of the firm s intended restraint. Andrew Norton, a London-based director with recruiter Michael Page, says there continues to be a shortage of suitable candidates for the investment banks and rates will always go up if there s a shortage . On the other side of the Atlantic, the picture is slightly different. This year it s a different story. It could struggle, he says, with younger recruits.
Younger employees are motivated by making a name for themselves and often, that comes down to money.
If the economy continues the way it has, then Morgan Stanley will have a hard time if it doesn t budge. There is a precedent for Morgan Stanley s refusal to follow the market blindly. In 1994 Salomon Brothers decided to link trader compensation to corporate, rather than individual, performance, but was forced to back down when it experienced recruitment and retention difficulties . Similarly, SBC Warburg prior to its merger with UBS adopted a policy of employing only graduates in operations, and was forced to reverse the decision. The tyranny of the marketplace is a real risk for investment banks.