Hope everyone is doing well and staying safe. I've been noticing a lot of ER Associate roles on LinkedIn and other places which is a little confusing to me as we've all heard about how the industry is shrinking due to a variety of reasons. I understand in this market, a good analyst may be more useful than before; however, why the need to hire more associates in what's supposedly a shrinking industry in an uncertain economic climate?
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The ER industry “dying” is a popular talking point on here from insecure IB guys.. people have been saying the industry is dying now for years while in practice, many MM banks especially have increased their stock coverage and number of analysts hired.
In addition to what equityresearch99 said above, there is usually a decent amount of turnover in the associate position and its common practice to have a list of candidates in the wheelhouse for when that inevitably happens.
So you’re saying these positions might not be open right now and they’re just being posted to build a pipeline for when an Associate leaves?
Sometimes that is the case, yes. I can say for a fact that my firm does it preemptively if they think there is a good chance that an associate will be leaving. But I can't speak for all firms of course. Also there is considerable cost pressure mounting for some firms, so its not unlikely that far more expensive "legacy" senior associates are in the pipeline to be replaced by younger/cheaper alternatives. I could be wrong, but that's just my $0.02.
I had a phone screen 1.5 months ago for an associate position and they told me later that they are still "figuring out how to move forward". They initially told me the process will be quick. What can be the lag about? I reached out and they said they still haven't started round ones. How does an analyst without an associate continue the work?
It ebbs and flows, I know back in the winter UBS had a lot of turnover bc they got a new DOR, so a lot of positions went up.
Dunno about industry wide though.
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Generally turnover means people leaving. Either voluntary or involuntary.
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What I've seen at a number of banks is that a given analyst is pushed to cover more companies/sectors that are tangentially related to their core coverage (e.g. large-cap banks guy picking up the broker-dealers/AM; P&C guy picking up Life; MCO/Facilities picking up Distribution&HCIT; etc). To compensate for the increased workload, they'll often give the analyst an associate, but it's still a great money saver for the bank because they can eliminate a whole team from their cost structure.
From what I've seen, there's been a decent amount of associates that jumped to buyside recently. Refilling the ranks for some. Other hiring is likely related to the aforementioned consolidation of sectors.
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