What is going on?

Industrial competition has never been so intense at the local level.

In recent years, US-based Jefferies, New Zealand-based Jarden, and Barclays-backed Barrenjoey Capital Partners have all entered the market, with the ambition to become full-service investment banks of foreground.

New players also meant new hires, as well as plenty of speculation about which banks would be forced out of the market if new entrants were successful.

It also forced banks keen to retain their teams to rethink incentives, as well as the work environment. There has also been a surge from overseas: Goldman Sachs raised graduates’ salaries and renewed its promise to give Saturday leave after a survey of 13 junior investment bankers exposed their concerns about 120 hour work weeks and 3 a.m. bedtime.

But in this kind of frantic M&A environment, one can generally expect banking moves between companies, especially at the more junior level.

Within offshore banks, discussions about bonuses are intensifying as expectations for the coming year are being finalized. And there are always deals to be made around the purchase of packages, as Magellan demonstrated during its hiring wave.

At the junior level, packages for bankers with around five years of experience have exploded. So much so that an independent advisor said recruiters had suggested that hiring be suspended until things calmed down, noting what was previously a base of around $ 160,000 plus bonuses. was approaching a quarter of a million dollars.

Why bankers don’t budge

There are a number of possible explanations why investment bankers are not moving and trying to cash in on this demand for people.

On the one hand, many have already chosen their employer – and they will likely support the company they hope to emerge from this frenzy. An investment banking upheaval may seem far away – and it just might be – but it will come.

Second, negotiators say investment banks tell clients – who seem more willing to go along with the idea – that they don’t need masses of analysis and data. Instead, clients rely on the advice of more experienced bankers.

And in some cases, negotiators say, there is more general acceptance that in investment banking, just like in many industries globally, there is a skills shortage. That’s not to say the pressure is off – bankers want deals to go through as quickly as possible, especially in an environment where they often drag out.

And finally, a hectic trading environment means that bankers spend a lot less time offering deals and a lot more time working on them. And this also contributes to greater pleasure at work.

Whether this is a permanent change is guessable. But for now it seems an M&A boom, coupled with a rush of new entrants, has had unintended consequences in the short term.