2024 was a resurgent year in finance – solid market activity and robust growth returned to an industry no longer hagridden by the pandemic. The private credit and metals markets marched all year long, while debt markets, M&A deals, and leveraged finance activity generated momentum towards the end of the year. From a hiring perspective, opportunities in the front office picked up considerably, though middle office hiring retained its latency: the prevailing trend being the backfill of churn, rather than headcount growth. We saw churn particularly prevalent at the associate and VP levels, with minimal deviation from average churn rates for senior individuals.

As is well-documented, 2025 is set to pose a number of new challenges that could leave the financial landscape looking markedly different in twelve months’ time. The actions of key individuals are touted to define what is expected to be a volatile year: Trump, Putin, and Xi Jinping; the OPEC cartel; and Britain’s Labour government are key actors. Broadly, volatile market conditions should necessitate greater demand for risk professionals across the board, but there remain some caveats. Here’s what we expect:

America:

Much rests upon Trump; it is undeniable. The extent of his campaign’s flagship trade tariffs, particularly with Europe and China, and the timeline of their implementation remain characteristically ill-defined. If tariffs and tax cuts are introduced slowly, the attritional battle of economic forces we saw in 2024 is likely to continue, meaning domestic growth may remain slow but stable, and finance activity will resemble the last twelve months – a fairly positive outcome for the industry. Areas for potential growth are likely to be within lending and M&A advisory, rather than on the global markets side. Origination hires are likely to reflect this activity, and we may see some tentative growth of financial risk teams to support this, particularly in credit risk.

There is the possibility that trade tariffs are rolled out quickly, with significant tax cuts closely in tow. In this instance, US national debt and inflation could balloon, forcing interest rates up towards the latter half of the year. If this is the case, leveraged lending and securitisation activity are likely to decrease, bringing to a halt the growth seen in these areas in 2024, rendering new hires very unlikely. In scenarios such as this, investors incline towards fixed-income instruments, which tends to increase demand for market risk professionals. In fact, unpredictable markets increase the stock of market risk professionals across the board, especially at hedge funds, who look to ride the turbulent waves of volatility. On the sell-side, lenders to funds must have a strong grasp on trading limits and counterparty analysis, and thus alternatives risk divisions within investment banks are likely to grow to ensure stability within this area.

If Trump’s administration does take this more bellicose course of action, it is likely that banks will look to countercyclical investment strategies like long-term infrastructure/asset financing or very short-term distressed debt lending. This will do no harm to the real asset space, which is already enjoying a period of high activity and growth. What could prove a sticking point is Trump’s outlook towards renewable and clean energy projects. The president’s first term demonstrated his desire to pull out of the Paris agreement, and he has already signalled his intent to ramp up North American oil and coal production. On the other hand, Western European powers are broadly singing from the same hymn sheet on renewable energy, and thus we could see bifurcated real asset/infrastructure activity – a focus on renewables in Europe and greater fossil fuel infrastructure in America.

Europe

Understandably, the 2025 curtain opens on an apprehensive Europe. Trump’s potential trade barriers are of real concern and could likely lead to retaliatory measures. What does this mean for European risk talent? Tough to say, but less forgiving lending conditions and a general squeeze on underwriting services to automotive manufacturing and similar industries is likely. This should be eased by the downward trajectory of inflation rates across the continent, but still, risk teams in the industries affected by tariffs are unlikely to grow.

However, there remains some optimism about European equities unaffected by tariffs, which can expect an injection of cash from investors, so market activity will remain busy in this area. Ultimately, European financial risk teams are unlikely to see increases in headcount but the focus for talent here will be directed towards equity and renewable infrastructure financing. Concomitantly, non-financial risk teams will be required to grow to deal with vulnerabilities in internal controls that may arise from pressures on corporate cost structures. Equally, regulatory scrutiny often increases during periods of economic volatility, particularly for cross-border trade and tariff compliance, so compliance teams will have their hands full.

Commodities

No crystal ball is required to predict that commodities markets will remain increasingly volatile in the wake of severe natural incidents and the ever-changing geopolitical climate. A key question to be answered this year centres around China’s market share of the metals industry, and subsequently how they use that leverage in response to Trump’s tariffs. For Western commodities trading houses, the talent war rages on in the metals sector: last year, Vitol poached several members of Glencore’s iron ore team, while Mercuria has aggressively hired about 40 staff in metals in a few months. This hiring frenzy is a typically bullish front-office strategy, whereas risk hiring strategies tend to be more circumspect, as businesses gauge trading volumes and the complexities of the market. We expect a steady stream of metals risk professionals moving franchises this year, which we wrote about in greater detail here.

The energy markets play host to several other key questions: Will OPEC be forced to lower the price of oil given North American production continues to grow, and how will supply/demand change if this is the case? Will Vladimir Putin continue to evade sanctions around Russian energy trading, and will more be imposed upon him? Equally, unforeseen force majeure events exacerbate the challenges and uncertainties faced by commodities trading desks, and thus we expect a continuance in the growth of risk teams in both financial risk and non-financial risk spheres.

Conclusion

In what looks to be a volatile year to come, getting ahead of the curve by bolstering risk functions in the first half of the year, as opposed to hiring in the wake of incidents or failings, will be paramount to success for financial institutions. Only time will tell which financial risk teams will come under stress this year, but there are fewer question marks about 2025 on the non-financial risk side – growth is needed in this area to deal with supply chain issues and regulatory compliance.

Moreover, we increasingly expect to see the development and integration of automated and machine learning tools impact hiring. Several investment banks are eager to harness the power of AI to augment risk processes, especially when it comes to reporting and data enrichment, and the integration of such technology could have the effect of top and tailing the workforce, with more of a focus on analysis completed in the middle layer of risk management. A secondary aim for this technology is to ease the regulatory burden on risk talent, which in turn allows risk teams to get their noses back out in front of the markets, which will prove crucial in the year to come.

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