At the start of this year, the skills shortage is affecting all sectors. Investment banks are also threatened by the ‘Great Resignation’. While M&A activity remains high in early 2022, there could be a shortage of skilled talent to assist with transactions. Experts at AURIS Finance, a mergers and acquisitions consultancy, take a closer look.
In 2021, mergers and acquisitions reached all-time highs. Global transaction value totalled $5,800 billion, the highest level since before the 2008 financial crisis. This is a 63% increase on the previous year. For 2022, experts are predicting another very bullish market. The reason for this is that investment funds now have a very high level of liquidity. Far from diminishing the hunger for transactions, the covid health crisis has led to a renew appetite for acquisitions. On the one hand, there are companies seeking cost savings by acquiring targets, and on the other, there are investment funds that are becoming increasingly engaged in the M&A market. Their goal is to hold on to companies for a short period of time and rapidly enhance their worth, before selling them again.
The “great resignation” of American professionals
For the time being, however, the market is threatened by a shortage of experts. The phenomenon is particularly acute on the other side of the Atlantic, where investment banks are struggling to retain their staff. Indeed, the “Great Resignation” is affecting all sectors across the Atlantic, with roughly 4.5 million people having already decided to leave their positions. The health crisis and remote working appear to have sapped the motivation of the highest-paid employees. The bonus season could be critical, with a succession of departures. So much so, in fact, that some US investment banks are now turning down business because of a lack of available staff. To guard against further departures, world leaders JP Morgan and Goldman Sachs have opted to increase bonuses, which could rise by 40% this year. At the same time, the average starting salary for a young junior investment banker has risen by 30% to $110,000 a year.
France also facing skills shortage
Although the structure of the French labour market implies greater stability of professional talent within groups, France has not been spared the phenomenon of resignations. According to Dares data, the number of resignations from open-ended contracts increased in the second quarter of 2021, and the number of resignations in the summer of 2021 was almost 20% higher than the level recorded two years earlier. In another sign of workers’ desire for greater freedom, the number of micro-enterprises has soared, with nearly one million new companies created in 2021. All sectors have been affected, particularly the financial sector, where workers are seeking greater autonomy in their search for meaning in their professional lives.
Get the support you need from an independent consultancy
Companies planning a sale or acquisition might turn to independent consultancies such as AURIS Finance, in addition to investment banks. Our organisation functions on a human scale, we have sector-specific expertise, and our professionals have many years of experience. We will work with you throughout your selling or acquisition transaction.
