Royal Bank of Scotland is beefing up debt headcount aggressively. In its fixed-income division, RBS Financial Markets, staffing was up 25% last year. This year it aims to accelerate that growth. If it is to fulfil its ambitions to grow from a strong sterling and loan house to a broader business in euros and dollars, it has no choice but to recruit fast.
When Rob Jolliffe joined in July 2002 as head of primary markets origination, he was charged with growing the debt capital markets business across the credit spectrum from investment grade to high yield and across all currencies. He found that recruiting in large numbers was relatively easy last year because so many good people were available. He thinks RBS can increase the momentum this year, even in a tougher hiring environment, because it now has a bigger profile in the market.
"We are one of the last of the big banks to build out fixed income in Europe," he says. "We're expanding, which is the appeal of coming to RBS. If you're coming from a traditional investment bank, you can be more influential here." Formerly at Goldman Sachs, where he headed FIG debt capital markets origination, Jolliffe is a good example of this. Another is Matt Carter, who was hired this April from CSFB, where he was head of investment-grade syndicate covering financial institutions and EuroMTNs. At RBS, Carter is head of debt syndicate.
Jolliffe says: "Matt Carter was number two in CSFB whereas he will be number one in syndicate here. He wanted to move, even though CSFB is number six or seven in the league tables, because he wanted to be running a business and helping develop strategy from an early stage in our build-out."
This year alone, RBS has hired in more than 30 newcomers to its financial markets division. As well as selecting those he knows Jolliffe has two headhunters on the case, while the trading team uses another. The human resources department at RBS has also got a new lateral hire team, which concentrates exclusively on external recruitment.
RBS's new recruits fill spots across syndicate, origination, credit research, sales and trading. In July alone, RBS recruited eight new sales staff. Many of them have been appointed in Europe in France, Spain, Italy and the UK, but there have also been hires in North America, Australia and Asia. Significant product hires have been made in high-yield and structured credit.
The plan is to grow into ancillary businesses that build on core strengths. "For example, a year ago we were beginning to build a high-yield business. Now we have got a critical mass there and can begin to look at how to expand from this," says Jolliffe.
Three hiring rules
Jolliffe says there are three things you have to think about when you are hiring the right person. "Are they the most able, how moveable are they and are they able to do the job I have in mind now?"
He says there's no point hiring brilliant people who can't also bring out the best in others. "I would rather have a vacancy than hire someone who will not fit in. It's no good them single-handedly bringing in a large amount of revenue if they upset the working balance of a team that's generating say $200 million."
When it comes to pay, Jolliffe concedes that the best people never come cheap, but says the bank will only pay as much as it needs to. Some guaranteed bonuses are rewarded but other recruits have to rely on good faith.
RBS is not averse to hiring entire teams from other banks. It hired a complete team of 10 from ING in Japan, for example. But Jolliffe says the key is to get business managers for new teams established so if they know of or come across a particular seam of talent in another bank they can tap it. "In this way, we have recently hired seven people from Morgan Stanley who all sort of knew each other before, although they didn't all work together," Jolliffe says. "We have also hired several people from CSFB."
Jolliffe admits that with such an ambitious expansion plan, some mistakes are likely, but that this is all part of the learning process. "Where we are, we will discover that some things won't work out. But we are still evolving and figuring out what we can do. The main thing is that we continue to build on areas where we are strong."