It seems that most news stories regarding banks over the past six months have been about wide-scale redundancies or pending staff cuts. It is likely that we have not seen the last of these. Moving into 2017, there will be more redundancies as banks refocus their businesses and downsize – or close down altogether – underperforming business units.

As this happens, there will be a large number of bankers looking for new jobs with a smaller-than-usual supply of roles in other banks for them to move into. So where will they go? Let’s have a look at the options.

Other banks

Despite all the downsizing in the sector, there is still some hiring activity in banking. However, rather than the usual recruitment cycle that banks go through in the post-bonus season (bonuses usually being paid between late December and mid-March) the market is now characterised more by pockets of isolated hiring.

The bulge bracket banks will continue to have some specific hiring needs but given the market, they can afford to be picky. For the most part they will be looking for candidates that immediately hit the ground running and add value from day one.

Outside of the bigger names, the boutique investment banks and advisory firms will also look to pick up a few hires. But due to their relative size, their hiring numbers will be much lower and it is only really M&A professionals they are interested in.

Given how Chinese banks have taken over investment banking league tables they may seem to be an obvious destination and are indeed picking up some China-focused bankers. However, if you don’t speak Mandarin or have China deal experience, it may be difficult to secure a position with any of them.

Private equity and hedge funds

These two avenues have tended to be the preferred destination for many bankers seeking to advance their careers outside of the investment banking arena. However, the barriers to entry, certainly for the better regarded private equity and hedge funds, tend to be quite high, not least for a relative lack of opportunities.

The typical path into this field also tends to be at a more junior level, whereby higher-ranking analysts and associates in the top-tier bulge bracket banks resign from their banks to move to the buy side.

Demand among these firms for more senior bankers is not as great, and many of the larger private equity firms expect their analysts to leave the firm after two to three years to undertake  MBA courses.

Fintech

The buzzword on the street at the moment; however, it is still a very underdeveloped market in Hong Kong. Most of the money being deployed in fintech at the moment is actually being spent by large financial services firms to upgrade or change their existing internal technologies.

When many people use the term “fintech” they are actually referring to the start-up or “disruptor” organisations that come into being to offer an alternative to the traditional banking model. These digital banks, payment companies, robo-advisors and so forth are, however, in their infancy in Hong Kong compared to mainland China.

As a result, the market is populated mainly by companies that burn through their seed capital and fold within a year or two. Salaries in this space are also a good deal lower than the market norm for financial services because most companies don’t have the cash flow to support anything close to market rate. The pay-off for employees may ultimately come in the form of realised equity further down the line, but this is far from a regular occurrence.

Non-financial services businesses

Many bankers are burned out and disillusioned with the industry. More often than not these days they are very open to opportunities to deploy their corporate finance skills within a company other than a bank.

Unfortunately, once again, supply of candidates is greater than demand from corporations. While many larger companies have sophisticated corporate finance, investor relations and strategy/M&A business units, they tend to be relatively lean in terms of staff numbers. Many of the roles also require specific industry and product knowledge.

Ultimately, the industry is in a process of rightsizing itself. There are probably too many market participants to go around; couple this with a less-than-encouraging economic outlook and it only makes sense that the numbers employed in banking are decreasing.

But the banking recruitment market is not about to grind to an absolute halt. There will still be job opportunities, but it is going to be a more competitive market for candidates as there are fewer roles to go around and employers are specific about what type and level of experience is required.

This article appeared in the Classified Post print edition as Wondering where to turn.