The Real Cost of Vacancy: Why Delayed Hiring is Hurting Your Bottom Line

Leaving a senior role vacant in a UK investment bank might feel prudent—why rush the MD, Head of Coverage, or CFO hire? But in 2025’s market, prolonged vacancies rarely keep things steady: they silently erode deal flow, employee confidence, and commercial momentum. In investment banking, especially here in the UK, inaction comes at a steep price.

Slower Decisions, Fewer Deals

• Q1 2025 M&A volumes fell to the lowest since mid-2020, with deal value dropping 40% year-on-year to £40 billion (Experian).
• While overall UK inward and outward M&A figures show some activity (e.g. £19.2 bn inward and £9.4 bn outward in Q1), the slump in volumes and domestic activity underscores a cautious market (Office for National Statistics).

Hiring Trends & Talent Retention

• Though hard to pinpoint a specific source for investment banking senior hiring trends, sector commentary suggests growing demand in areas such as leveraged finance, DCM, restructuring, private credit, and capital solutions.

Regulatory & Governance Pressures

• The 2024 UK Corporate Governance Code takes effect for financial years beginning 1 January 2025, mandating boards to monitor risk management and internal controls, with Provision 29 (requiring a declaration of effectiveness of material controls) phased in starting 1 January 2026 (PwC) (ICAEW).
• Firms must comply with FCA and PRA operational resilience rules by 31 March 2025, including mapping, testing, and setting impact tolerances for important business services (Ernst & Young).
• The Bank of England and FCA have been explicit that firms must bolster resilience against severe disruptions, such as the CrowdStrike outage, by March 2025 (Reuters).

Economic & Market Background

• Surveys show that around 70% of UK businesses expect higher turnover in Q1 2025, with ~73% anticipating improved profitability (The Times).
• However, economic realities tell a mixed story: the finance sector’s pay growth, including bonuses, fell to just 3.1%—the lowest across sectors—amid hiring softness and tightening budgets (The Guardian).

Summary: In IB, Time Without Leadership Is Alpha Lost

Every month a pivotal role remains unfilled is a month of slowed execution, delayed deals, and heightened regulatory exposure. Acting decisively—with a sharp brief and a search partner versed in UK investment banking nuances—is essential to safeguarding not just team morale, but deal pipelines, governance, and long-term profitability.

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