The possibility of a recession induces chaos and mayhem as American workers brace themselves for potential layoffs, hiring freezes, and an overall weakened job market. However, the wrath of a recession will not necessarily impact the U.S. workforce across the board. Some industries weather the storm and offer a safety net for their employees. This is because such industries offer indispensable services and products to their consumers, while others may be affected by reduced spending habits. During these economic highs and lows, OSI has remained committed to meeting our clients’ business needs, accelerating growth, and promoting innovation through our meticulous processes. In this series, we will dive into which industries are most recession proof and why, beginning with the Financial Services industry.
Concerned about the stability of their investments, protecting their holdings, and shifting economic trends, more people will turn to financial services during a recession. There is no better time to seek out financial advice. OSI prides itself on its vast work in the financial services sector. Our partnerships include, but are not limited to, banks, hedge funds, consulting companies, assets managers, and insurance companies. Certain sectors of financial services thrive more in a recession than others though. Let’s take a look at what those sectors are.
The economic instability that has presented itself as SVB’s run on the bank has shown us the demand for those with risk and regulatory backgrounds is at an all-time high. SVB’s collapse has been speculated to be related to the poor risk management efforts and lack of regulatory regulations that they would need to adhere to. Recently, it has been reported that over 300 banks have found themselves to be at risk and are on the move to ensure that they do not meet the same catastrophe as SVB. In doing so, they are bolstering and restructuring their Risk and Regulatory teams in efforts to properly mitigate any chance of default. OSI has continually been an industry leader in times of crisis to bring value-added human capital for our partners.
There will be a continued emphasis on risk management and regulatory compliance. Banks will continue to focus on risk management to ensure they are well prepared for potential financial, operational, and reputational risks. This means the demand for professionals with expertise in risk management will remain high. Banks will also continue to face increased regulatory scrutiny, which will drive demand for professionals who understand regulatory compliance requirements and can help banks stay up to date with regulatory changes in this volatile market. Overall, the demand for risk and regulatory banking professionals is expected to remain high in 2023, with a growing emphasis on sustainability, digital transformation, risk, and regulatory compliance.
The financial market has undergone significant changes in recent years, causing investors to become more aware of the impact that companies have on environmental, social, and governance (ESG) structures. As a result, there is a growing demand for financial professionals who possess sector-specific technical skills to understand and analyze the ESG risks and opportunities. The integration of ESG standards into investment decision-making processes is likely to continue to accelerate, driven by regulatory and market forces. This will create a growing demand for professionals who can provide ESG-related advice to clients, whether it be in the context of investment management, corporate finance, or risk management.
The start of the year 2023 has been rocky to say the least, and it has produced uncertainty for economists predicting a challenging Macroeconomic environment. M&A deals within the financial services industry took a dip in Q4 of 2022. However, in the face of adversity is at times when M&A shines its brightest. Although the M&A market will remain difficult this year, consulting giants like PWC are predicting that M&A will have hotspots within Private Equity and Fintech where investors’ interests remain the highest. That said, competition for highly skilled talent that can deliver on the execution and growth strategies of the deals is at the forefront of investors’ minds. When talent becomes a challenge, investors will partner with firms such as OSI to find well vetted talent to reduce risk and uncertainty.
Financial services go hand in hand with Private Equity & Asset managers as a compelling duo. Although, last year 2022 Private Equity buyouts were in significant decline resulting in all-time highs of PE dry powder. That said, the current environment presents opportunities for the dry powder to be utilized. Asset managers will see deals at distressed prices as well as opportunities for value creation. 2023 poses a unique offering for PE & Asset Managers to turn their focus on increasing valuation and expected long-term returns. Human capital plays a critical role within the value creation of assets and will continue to be a high need as Asset Managers make new investments.
In recent years, there has been a growing demand for quantitative researchers across various industries, including finance. In the finance industry, quantitative researchers play a critical role in developing and testing trading strategies, managing risk, and analyzing market trends. Some factors that continue to influence the hiring trends for quantitative researchers in 2023 and beyond include global economic conditions, technological advancements, and regulatory changes. OSI specializes in finding the best and brightest within the quantitative research space, building out our clients’ teams with individuals who can significantly add to the bottom line with various strategies.
Over the years, OSI has fostered professional relationships with top firms and leaders in the industry, gaining guaranteed immediate access to their expertise and support. We have secured over 1000 hires with a leading global bank in the span of ten years, filling up different areas of the business such as capital markets, corporate, and commercial & investment banking with first-rate candidates. During a recession, trustworthiness is above all a key component of seeking and doing business. From a 20+ year partnership with a billion-dollar consulting firm to sourcing incredible individuals for C-suite positions, there’s a reason why the financial services sector has been a strong suit of ours – which we encourage you to read up on!