Curious as to everyone's thoughts on how the hiring market will play out heading into 2024. With treasuries falling the past few days/weeks I think there has been a bit of a shift in sentiment that we may be at or close to the bottom (I understand this can be argued, and that certain asset classes may have further to go).
With that being said, people on the principal/owner side of the business do you anticipate transaction volume to pick up throughout 2024, and do you think we will see firms start to hire more come the beginning of the year? I imagine if transaction volume picks up firms want to be ready.
Definitely agree that things are looking up sentiment wise, but hiring won't pick up until deal flow does. A lot of companies are already heavily staffed with people sitting on their hands in anticipation of the market picking up. When things improve, they aren't going to immediately hire new personnel, they're just going to give the people they've been carrying actual work to do again.
Bingo, for junior roles it's going to be worse. As mid level weren't backfilled, people have had time to learn and shift in and since they cost so little comparatively they were carried through the downturn. It'll be targeted hiring for senior roles that weren't backfilled, but need experience when there's actual flow and speed needed.
Also along those lines the junior levels that didn't skill up, could face layoffs since people will be joining the market and the labor market will of reversed, meaning people are needing work as more graduation classes hit the market. Someone that has been barely working filling excel worksheets but costs 10k more than a kid coming out of college is easily replaceable.
Problem is the treasury rates are coming down because people are hoping and praying they come down (investors are buying thinking we will not see these rates again). Fed has clearly stated they do not plan to cut. Yet investors, companies, everyone, keeps banking on cuts because thats what they want. I don't see firms hiring more in fact I think 2024 will be the year of cuts and I hope I am wrong. Firms tried to hold onto talent in 2023 and by the end of the year we started seeing large lots of layoffs (just reference this forum and you can see it).
Sure there is a very good possibility the market stabilizes in 2024, but that doesnt mean mass hiring. Banks are still holding onto several loans that are pretty much going to default as there is no way out as the original buyers paid too much. Some areas will struggle, some will do exceptionally well. Private credit will do really well regardless because conventional banks will be out of the space. Acq shops will probably get slaughtered unless they get some cheap LP terms.
I have a good broker buddy thats in one of the top performing investment sales groups for multifamily in the East Coast. Theyre doing 75-80 BOVs a month. Yet they have only been able to list 1 deal, which will not trade because seller has unrealistic expectations. Sellers are not being forced to sell yet and they will not sell for a loss. So either rates come down or sellers cut price, this is the only way transactions pick up and the bid-ask spread closes. Otherwise 2024 will be the same if not worse.
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