As we head into the final weeks of 2025, this time of the year naturally has us reflecting on hiring activity for the last several quarters as well as what 2026 may bring. As we think about how to summarize 2025, it might be best described as a tale of two markets. After the year began relatively muted, similar to the second half of 2024, hiring activity picked up considerably during the spring months. This was followed by the typical summer slowdown period, only to see another flurry of activity through the fall months and into year-end. Backfill hires represented the lion’s share of those hires while new headcount additions remained relatively muted.
When people ask what we’ve seen in terms of industry recruiting trends at the firm level, the answer can differ greatly based on whose perspective you’re asking from and what section of the industry they fall into. As an example, wealth managers and private investment firms have continued to experience a steady, if not growing, pace in their hiring activity. The race among wealth management firms to scale further through new advisor team additions and standalone RIA acquisitions has been a furious one, which has also necessitated further operating infrastructure hires to support those larger businesses. Private equity/credit hiring has remained brisk across investment teams, finance, and client engagement positions, among others. Meanwhile, many traditional asset managers are pursuing new areas of potential growth, pushing into the ETF space more wholeheartedly and building their presence within the wealth management channel amid a challenging flows backdrop within the institutional channel. Most of that hiring activity remains focused on investment roles, whether deepening the bench of talent more broadly or replacing resources in larger sectors such as technology and healthcare. Perhaps driving some of that activity is the challenging performance stretches that some active managers have had relative to their underlying benchmarks and passive managers over the past couple of years, something which could make a pronounced turn if volatility remains at elevated levels. On the client-facing front, searches have been tied to adding experienced resources with contacts in the private wealth channel or multi-channel generalists who can prospect for new business across institutional and intermediary channels while also handling ongoing client relationship management duties. Another area investment firms have been adding resources to is the marketing function, looking to establish more of a regular marketing cadence with clients and prospects. As highlighted in industry press articles, there has been a pronounced move away from long-form whitepapers, prevalent for many years, to quick-hit, topic-based content meant to educate and position the firm as a distinguished subject matter expert without losing audiences to an overwhelming level of detail. As far as AI use within the industry, its application varies greatly, ranging from use as an investment validation or screening tool to a source of lead generation and segmentation, new marketing efficiencies creation, client onboarding/operations automation and standardization, and recruiting support. There appears to be consensus that AI will lead to greater operating efficiencies over time but how much those efficiencies will improve firms’ profit margins is highly debated.
From the candidate side, potential job seekers have adopted a definitive risk-off posture over the last several months, especially when compared to recent years. Response rates for new searches are down markedly from normal levels and the requirements demanded by candidates who are open to exploring new roles are increasingly high and, in some cases, unrealistic. This has been evident from a compensation expectations standpoint as well as job scope and potential progression path. Instead, the more common refrain heard from candidates is that they are “comfortable for now” in their current position. When probing further with those same candidates, many of them express a reluctance to consider any outside opportunities as they have concerns about the economic backdrop headed into 2026, and if they accept a new role and financial markets pull back, they could potentially be left out of that role as one of the newer resources on the team. In some cases, candidates have even acknowledged that their current role/firm isn’t viewed as their long-term home but it is good enough for now. The widely adopted term “job hugger” used to describe this behavior couldn’t be more accurate.
As we head into 2026, it will be interesting to see how industry hiring takes shape in the coming months and if there will be the usual annual uptick in candidate interest following year-end bonus payments or if the current shortage of candidates continues to be the norm. For ambitious candidates who are willing to accept some level of potential risk, there could be an attractive opportunity to pursue new roles in a less crowded field. From the hiring manager side, smaller candidate slates appear likely until the current supply imbalance evens itself out. In our view, this imbalance could dissipate in short order with increased confidence in the continued stability of financial markets but time will tell.