Technology and innovation have disrupted countless industries over the past several years, not the least of which is the recruiting industry. In the recent past, headhunters, the proactive agents of recruiting firms, would be on the front lines and phone lines seeking the best talent for the clients they represented. Frequently, headhunters reached out to talented people who were not actively seeking employment, hoping to steal them for the benefit of their clients.

At the same time, those in search of a position would often opt for the services of recruiting agencies, relying on these agencies to match them with a suitable employer at a competitive salary.

Not to wax nostalgic, but it was a good system. Agencies kept employers on their toes because losing valuable employees was an ever-present risk and headhunters benefited employees by offering opportunities to talented individuals who might otherwise languish in their comfort zones.

What Happened?

Not to oversimplify, but the Internet happened. With the Internet came innovations of all stripes—social media sites such as LinkedIn, sites specializing in job opportunities for specific industries, job board aggregators, and powerful software capable of searching resumes for critical keywords.

As a result of these developments, companies have unprecedented access to job seekers and an array of available software to filter resumes for the most logical candidates.

Recruitment Firms May Be Down but They Are Not Out

The opportunities provided by the Internet have not gone unnoticed by recruiting firms. Many new firms have blossomed online and most established firms have supplemented brick and mortar operations with an online presence. While the direct access companies have to the job pool via the Internet has had a negative impact on recruiting firm revenues, they are carving out a niche in an increasingly competitive market.

Professional recruiters and headhunters have insider knowledge and established relationships with their clients, which provides them with a distinct advantage.  Combine that with the real world experience which enables them to evaluate the personalities behind the resumes and you can readily understand why their extinction is anything but imminent.

Hedge Fund Jobs

While recruitment agencies remain an option for those seeking a position with a hedge fund, experience suggests that one’s networking contacts provide the best interview opportunities. That said, it is also important to recognize that good recruiters can open doors for you and, provide valuable industry insights.

Passing muster with a recruiting firm can be a real confidence booster. After all, the recruiting firm represents the interests of the prospective employer, so a successful interview with a recruiter implies a certain potential for success.

Always take the time to craft a handwritten thank you letter and send it snail-mail rather than email. Your goal should be to leave a positive impression with everyone in your network. Small courtesies may be enough to set you apart from the pack and move your name toward the top of the list for present and future opportunities.

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The curious concept of a central bank employing negative interest rates to affect desired economic outcomes is not the theoretical musing of an eccentric economics professor.  At least one non-voting FOMC committee member suggested that a below zero fed funds rate might be appropriate for the balance of 2015 and beyond.

In remarks subsequent to the FOMC’s most recent meeting, Fed Chair Janet Yellen was emphatic that a negative fed funds rate “was not something that we considered very seriously at all today.” The operative word being—today!

Could This Happen Here?

The short answer is yes. A move to below zero rates is not without precedent. Early in 2015, Switzerland’s rates plunged into negative territory, as the Swiss National Bank (SNB) implemented a target range of -0.25 to -1.25.

The SNB took this action due to stem the alarmingly rapid rise in the value of the Swiss franc, which threatened to tank Switzerland’s export businesses. The Swiss National Bank’s efforts to devalue the Swiss franc via negative rates has been only marginally successful, prompting the SNB to eliminate select existing exemptions from negative rates for certain public accounts. Rather than abandoning the sub-zero tactic, some believe the SNB is prepared to double-down on the policy, pushing rates further into the negative.

Another example is the Euro Interbank Offered Rate, which is also in negative territory, not because the European Central Bank wanted to devalue the euro, but because it wanted to increase the velocity of money flowing among euro zone countries by providing an incentive to keep the money out of its banks. In theory, this will enhance investment and spending.

Neither example of negative rate implementation has been in force long enough to adequately judge its merits but, preliminary results seem less than spectacular. The value of the Swiss franc has proven difficult to suppress and economic growth in the European Union remains lackluster.

While Chair Yellen didn’t rule out the possibility of considering a negative rate move, she did not cite any current economic scenario that might be resolved by moving the fed funds rate into the negative.

Mounting Tensions

At the  annual meeting of the International Monetary Fund recently held in Lima, Peru, delegates made it clear to their American colleagues that the “dithering” must stop. Emerging economies, battered by undulating currency valuations and wild market swings, are making it clear that enough is enough!

Germany’s central bank is also green-lighting a fed rate hike but, it is too early to know if that  position is broadly supported by the European Central Bank.

Hedge Fund Jobs

The bottom line is this—a hedge fund is, first and foremost, a business and like any enterprise, prefers stability to chaos … certainty to uncertainty. This is particularly true with regard to hiring new employees. While hedge fund employment opportunities will always exist, the forces at play in the current economy are not conducive to abundant opportunities in the hedge fund industry or the broader financial sector.

Any move by the FOMC in the direction of negative rates would be infinitely more destructive to perceived stability than the relatively benign course of indecisiveness that is its current hallmark.

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Are Hedge Funds Achieving their Primary Directive?

October 19, 2015

Just over one month ago, Alpha Calling posed the question of whether or not hedge funds could and would meet investor expectations in the turbulent market conditions experienced since August 25, 2015. A Few Early Results In early September, the Lyxor Hedge Fund Index had risen 0.4% after plunging 3.3% in August. Year-to-date, Lyxor reports […]

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Continued Rate Uncertainty Flatlines Hedge Fund Job Prospects

September 21, 2015

With the most recent FOMC meeting in the rear view mirror, we have a few short weeks of relative certainty. As Alpha Calling suggested in its previous post, an argument that favored a rate hike was a difficult one to articulate. The committee obviously agreed, voting 9 to 1 against raising the fed funds rate—for […]

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Hedge Fund Fees Are Optional – Regulations Are Not

September 7, 2015

Much is made of the fees hedge funds charge clients. Hedge fund fees and hedge fund manager earnings are almost daily fodder for media pundits and presidential candidates alike. Arguments are put forward, which compare the top 25 hedge fund manager salaries in 2014 to the aggregate salary of the country’s 158,000 kindergarten teachers. The […]

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Will Hedge Funds Meet Investor Expectations?

August 24, 2015

At 9:35 AM Monday 24 August 2015, even the stunning 1089.42 peak market drop was insufficient to signal the end of the current bull market. As previously discussed here, the DJIA would need to plunge to 14,681.12 to mark the official end. The fact that the market is rebounding as this post was being written […]

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Two Timely Tips for Hedge Fund Job Seekers

August 10, 2015

The DJIA has plummeted, GDP has grown at a glacial pace and the number of Americans participating in the labor force is at its lowest level since February, 1978. Understandably, many having an interest in a hedge fund career are skeptical of the opportunities. The Facts Paint a Different Picture The hedge fund industry is […]

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