Which Financial Services Sectors Are Quietly Hiring While Others Slow Down

There is a puzzle in the 2026 market that we're seeing in market. Ask most people in financial services how hiring is going and you will hear some version of "slow". Ask us to fill a European asset-based finance mandate, or find someone who can originate and price a longevity swap, and the honest answer is that we are competing hard against two or three other firms for a population of candidates you could fit in a meeting room.

Both descriptions are accurate. They are simply describing different markets.

What makes this interesting is that the dividing line is not seniority, or geography, or even sector in the conventional sense. The areas hiring with real intent in 2026 have one thing in common: the work is generated by balance sheets and contractual obligations rather than by confidence. Deal-driven hiring rises and falls with sentiment, and sentiment has been volatile. Structural hiring does not care very much what anyone thinks about the market this quarter, because the capital has already committed and the obligations already exist. It is quieter, it is less visible in aggregate data, and in our experience it is where most of the genuinely competitive searches are happening.

Four pockets stand out, and one widely assumed growth area turns out not to be one.

1. Private Credit Has Become a Hiring Market in Its Own Right

Moody's expects private credit assets under management to pass $2 trillion during 2026 and approach $4 trillion by 2030 (Moody's, Private Credit Outlook 2026, January 2026). What matters for hiring is less the headline number than where the growth is going. Moody's identifies asset-based finance as the primary driver, with the market shifting away from straightforward corporate lending towards consumer loans, data-infrastructure credit and structured solutions — NAV lending, rated fund structures, PIK arrangements — and expects EMEA to gain momentum specifically.

That shift changes the profile firms need. Corporate direct lending draws on a skillset that leveraged finance has been producing for twenty years. Asset-based finance does not: it requires people who can underwrite a receivables pool or a data-centre lease structure, which is a securitisation and structured-credit background rather than a sponsor-coverage one. The candidate population is correspondingly narrower, and much of it sits in places nobody thinks to look — bank structuring desks, insurance asset management, the ABS teams that spent a decade being unfashionable.

2. Pension Risk Transfer Is Britain's Largest Quiet Market

If one market deserves more attention than it gets, this is it. LCP expects UK buy-in volumes of £40–55bn in 2026, with the upper end surpassing the £49.1bn record set in 2023, and more than 150,000 scheme members moving through to full buy-out during the year — roughly three times the 2024 figure (LCP, Predictions for the Pension Risk Transfer Market in 2026, 2026).

The consolidation happening alongside it is just as relevant to hiring. Three significant insurer transactions were expected to complete in the first half of 2026 alone: Athora's acquisition of Pension Insurance Corporation, Brookfield's of Just Group, and JAB's of Utmost's life and pensions division. Ownership changes of that scale reliably produce senior movement in both directions — people who did not plan to leave, and mandates that suddenly need filling.

The constraint here is not capital. It is people. Insurer and administrator resources are stretched and queues for buyout transitions are lengthening, which is a resourcing problem described in the language of operations. Bulk annuity origination, longevity pricing and scheme transition are small, specialised communities in which most of the credible names are known to each other and to almost nobody else.

3. Defence Finance Has Moved From Niche to Strategic

Few areas have re-rated as fast. European defence M&A reached $2.3bn in the first half of 2025, up 35% year on year, while the STOXX Europe Total Market Aerospace & Defence index gained more than 65% across the year. Order books at European defence companies rose 15% in 2024, and the combined free cash flow of the continent's eight largest defence groups hit a record of more than €8bn (Datasite, European Defence Deals Set to Soar in 2026, 2026). The European Investment Bank has tripled its dedicated defence loan facility from €1bn to €3bn, and private equity has moved in behind it, with Tikehau and others raising dedicated defence funds.

Defence sits at an awkward intersection of industrials coverage, government relations, export-control and ESG-policy knowledge, and genuine technical understanding of a supply chain most bankers have never modelled. Until recently very few people were building that combination deliberately, because there was no career in it. Now there is, and the firms moving fastest are the ones willing to hire the underlying capability and accept that the sector expertise will be assembled rather than bought ready-made. We ran a search of exactly this shape for a Paris boutique last year, and the most striking thing was how few of the strongest candidates had any prior contact with a search firm at all.

4. Restructuring Is Hiring for 2027, Not for 2026

The restructuring build-out currently underway is a bet on a pipeline that has not fully arrived. Ropes & Gray notes US private credit defaults running at around 5.8% once selective defaults and deferred-interest loans are counted — well above the 2–3% usually cited — with roughly $80bn of software debt maturing in 2026 and around €2 trillion of European commercial real estate debt maturing across 2024–2026. Approximately $100bn of distressed and special-situations capital has been raised in two years, and the ten largest distressed funds are targeting some $50bn more (Ropes & Gray, Deferred, Not Defused, 2026).

Their conclusion is that the market is underpricing the volume and complexity of restructurings likely in late 2026 and 2027. Firms that agree are hiring now, which is the correct sequencing: restructuring talent is scarce at the point it becomes obviously necessary, and the people worth having are generally busy when everyone wants them. It is one of the few areas where hiring ahead of demand is straightforwardly rational rather than optimistic.

5. The Interesting Exception: Compliance Has Cooled

It is worth correcting an assumption that appears in almost every market commentary, including ones we have written: that risk and compliance hiring is permanently underwritten by regulatory pressure.

In the UK, that has stopped being true for now. FCA enforcement fines fell to £124m in 2025, from £176m in 2024 and £568m in 2021, and the regulatory rebalancing towards growth has visibly dampened financial crime recruitment. Barclay Simpson's 2026 survey found starting salaries broadly flat through 2025 in real terms, with 75% of employers planning base increases of only 1–4%, and 51% of candidates reporting too few advertised positions (Barclay Simpson, 2026 Financial Crime Salary Survey).

The nuance is what makes it interesting. Even in a cooling market, 93% of employers said they struggled to find suitable professionals, and 60% still plan to add headcount. Availability has risen while suitability has not — the demand has narrowed onto people who combine regulatory knowledge with analytics and screening-systems capability, and there are not many of them. A soft market in aggregate can still be a difficult market for the specific person you need. The Financial Action Task Force is scheduled to assess UK standards in 2027, and these reviews have historically preceded hiring cycles, so this may prove a trough rather than a decline.

6. What This Does to Pay, and to Retention

Fragmentation is the predictable consequence. When demand concentrates into narrow populations, benchmarking becomes much harder: a title tells you progressively less about a package, and firms comparing themselves to a sector average will consistently misprice the roles that matter most to them.

The retention implication follows from the same arithmetic. If a capability sits with two hundred people in Europe and four firms are building in it, everyone in that population is being approached — including the ones a firm assumes are settled. The professionals in these pockets are not restless; they are simply visible to anyone doing the research. Firms that identify their own scarce-capability holders before someone else does have a real advantage, and it costs far less to act on than a counter-offer does.

A Note of Balance

Concentrated demand can unwind quickly, and every one of these areas carries a specific risk: private credit spreads are compressed and under regulatory examination, defence valuations embed political assumptions that may not hold, and the restructuring wave has been forecast before and deferred. Hiring into a pocket at its peak is an expensive mistake, particularly where a firm has paid a premium for scarcity that later evaporates. The argument here is not that these areas are safe. It is that they are active, and that activity is being consistently underestimated by anyone reading the market from headline deal volumes.

Conclusion

The most useful reframe we can offer is this: the loudest parts of the market are the least informative about it. Aggregate hiring data is dominated by the areas with the most positions, which are also the areas most exposed to sentiment. The pockets described above barely register in that data, because forty roles across Europe does not move a national average — and yet those forty roles are where firms are competing hardest and paying most.

For candidates, the practical implication is that adjacency is worth examining seriously. A structured-credit background is closer to asset-based finance than it looks; industrials coverage is closer to defence than it looks. For employers, it is that these populations will not respond to an advertised process, because they are not reading advertisements. They have to be identified individually and approached properly, which is slower, and is the only method that reliably works in a market this narrow.

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Sources: Moody's, Private Credit Outlook 2026 (January 2026); LCP, Predictions for the Pension Risk Transfer Market in 2026 (2026); Datasite, Market Spotlight: European Defence Deals Set to Soar in 2026 (2026); European Investment Bank, defence financing programme announcements (2026); Ropes & Gray, Deferred, Not Defused: Three Forces Reshaping Restructuring in 2026 (2026); Barclay Simpson, 2026 Financial Crime Salary Survey and Recruitment Trends Guide (2026).

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