Hiring pressure on Wall StreetSteve Rosenbush
As deal volume and fundraising surge deep into record territory, investment banks, private equity firms and hedge funds are scrambling to hire more people. You can't do more deals without a bigger team. The problem is particularly acute, because investment banks laid off so many people after the stock market crash in 2000. Hiring is all the more difficult because there are so many new players in the market--private equity firms, hedge funds and new small-and-medium-size investment banks. The result is that compensation is going up. I report on the numbers here. "Profit-sharing now goes deeper in the organization than it did during the boom in the '80s," said Phillip Phan, a professor at the Lally School of Business and Technology at Rensselaer Polytechnic Institute. Those bonuses are helping maintain the economic momentum in financial centers in New York, where financial services account for 5 percent of the jobs and 20 percent of the local payroll. That could be one reason why the city's housing market has been relatively resilient, compared to other parts of the U.S.