The Rise of Passive Candidates: Why the Best Talent Isn't Actively Looking in 2026

The deal market and the talent market are experiencing a dislocation. Global M&A volumes hit a five-year high in Q1 2026, up 27% year on year, and Europe has had one of its strongest starts on record — announced transaction value across EMEA up 82% on 2025, an eight-year high, driven largely by inbound activity into the UK (LSEG, Separating the Signal From the Noise, 2026). Demand for front-office capability is rising accordingly.

Willingness to move is going the other way. Gallup's Q4 2025 data shows just 28% of employees believe it is a good time to find a quality job, down from 70% in mid-2022 (a 42-point collapse). Among college-educated professionals, the figure is 19%. Meanwhile 51% are watching for or seeking a new role, but only 11% are actively looking; the other 40% are simply keeping an eye open (Gallup, U.S. Worker Thriving Declines as Job Market Pessimism Grows, 2026).

The market is busy, the talent is interested, and almost none of it is going to raise its hand. We find it takes around five touch points to get someone into a place where they can share their CV and look to have a conversation. In the teams we recruit for in London and Paris, this has stopped being a nuisance and started being the defining constraint on hiring quality.

1. The Visible Candidate Pool Is Adversely Selected

The uncomfortable finding is not that fewer people are looking. It is which people are looking.

eFinancialCareers surveyed some 2,000 financial services professionals in December 2025 on their intentions for 2026. Job-seeking intent clustered heavily at Wells Fargo, DBS, Standard Chartered and HSBC. It was lowest, by a significant margin, at Goldman Sachs. The survey's own conclusion was blunt: insecure bankers were markedly more likely to be looking than secure ones (eFinancialCareers, December 2025).

Read that as a hiring manager. Intent to move in this market tracks anxiety about the platform, not ambition about the career. The professional on a franchise that is winning mandates, paying well and promoting is not in the market — which means an inbound process, however well run, is filtering a population that skews towards people whose current employer is going backwards. Sometimes that is exactly who you want. Often it is not. Either way, you are not choosing from the market; you are choosing from the part of it that is uncomfortable.

2. The Application Channel No Longer Carries Much Of a Signal

Job boards have not become quieter. They have become uselessly loud.

Ashby's analysis of more than 100 million applications across 200,000 jobs puts the average at over 300 applications per role in 2026, against roughly 100 in 2021. Recruiters spend around 11 seconds per CV at first screen, and candidates are now 50% less likely to reach interview than they were five years ago (Ashby benchmark report, May 2026). In the UK, applications per role have more than doubled since spring 2022, and 79% of recruiters told LinkedIn they found it harder to identify qualified candidates in 2025 than the year before (LinkedIn, via People Management, January 2026).

Candidates can see it too. Robert Half found 38% of employed workers planning a search in the first half of 2026 — up from 27% the previous July — but 68% expected the search to take longer than their last one, and 59% blamed sheer competition (Robert Half, Job Optimism Survey, December 2025). Rising intent to look is not producing rising quality of applicant; it is producing more applications from the same people.

More applications, worse identification. That is not a paradox; it is what happens when volume rises and intent falls. The channel now reliably produces people who applied, which is a different quality from people who are right. For a senior front-office seat, the two overlap far less than the application count suggests.

3. A Contact Book Is Not a Search

Most firms accept the argument above and reach the wrong conclusion from it — that the answer is a recruiter with a big network who can "go to their people."

That is the same problem in a more expensive form. A database of known candidates is limited and not a complete picture of a market. It is also a sample with a specific bias: everyone in it has been in play before. They were approachable, they responded, they were logged. The professionals who have never taken a call, never been mapped and never appeared on a longlist are, disproportionately, the ones whose careers have given them no reason to look, which is precisely the group the eFinancialCareers data says you should want.

Our approach is deliberately the harder one. We start from the mandate, not from the file: mapping the relevant desks across London and Paris, identifying individuals by deal record, coverage and reporting line rather than by who is already on a list, and then using our network to reach them credibly — a warm route in from someone whose judgement they respect, rather than a cold approach they have no reason to answer. The network is the introduction, not the shortlist. Almost every strong placement we make is someone we did not know six months earlier.

The industry broadly agrees in principle: 83% of recruiters say engaging passive candidates will become more important (LinkedIn research, 2026). Far fewer have changed method to match.

4. The Approach Is the Filter

Someone who is not looking has no sunk cost in your process and nothing to lose by ignoring it. That changes what a first contact has to do.

An active candidate will forgive a vague approach because they are already invested in finding something whereas a passive one will not. The opening conversation has to be specific enough to be worth their time — what the desk actually does, who they would report to, where the revenue comes from, why this seat and not the eleven others they could have. Croft & Co's own view, argued elsewhere, is that credibility at this level cannot be manufactured through messaging; it is built through visible outcomes, and the approach either demonstrates knowledge of the person's market or it does not.

This is also where volume-led sourcing fails on its own terms. A hundred generic InMails to strong bankers do not produce a lower response rate than ten well-researched approaches — they produce a worse one, because the recipients talk to each other and the sender's credibility is spent in public.

5. Speed Still Decides the Outcome — and Faster Than It Used To

Once a passive candidate engages, the process must maintain its momentum and decisions be made quickly.

Banking and financial services is already the UK's second-slowest sector to hire, averaging 5.9 weeks against a national average of 4.9, rising to 6.5 weeks for senior leadership roles, and around 62% of candidates lose interest when a process drags (StandOut CV / SmartRecruiters, 2025). Those figures were built on active candidates. A passive candidate has a functioning job, a live bonus cycle and no urgency whatsoever; every week of internal deliberation is a week in which the rational choice is to stay. The default outcome of a slow process with a passive candidate is not a lost candidate. It is a candidate who quietly stops replying and never enters your data as a loss at all.

A Note of Balance

Search-led hiring is not the right answer to every seat. It is slower at the front end, costs more per hire, and is genuinely inefficient for roles where the market is deep and the requirement is standard — analyst hiring in particular still works well through contingent channels. The case for headhunting strengthens as the population narrows: when fewer than fifty people in Europe have done the specific thing you need done, the odds that one of them is applying to your advert this quarter are close to zero.

Conclusion

In 2026 the strongest professionals in financial services are not hiding. They are working, being paid well, and waiting to be given a reason. Gallup's 40% who are watching rather than looking will not become applicants; the market conditions that made them cautious are the same conditions that stop them raising their hand.

For employers, the practical implication is a change of question. Not "who is available?" — the available population is visible, growing, and skewed towards people whose platforms are struggling. The question is who are the best five people in market who can do this job‍, whether anyone has actually gone and found them, and whether the firm can move fast enough once they answer. Access to a list is not the scarce commodity. Original research, a credible route in, and a process that respects a candidate who does not need you — those are.

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Sources: LSEG, Separating the Signal From the Noise: M&A Booms in Early 2026 (2026); Gallup, U.S. Worker Thriving Declines as Job Market Pessimism Grows, Q4 2025 data (2026); eFinancialCareers, bonus expectations and job-seeking survey of c.2,000 financial services professionals (December 2025); Ashby, hiring benchmark report analysing 100m+ applications across 200,000 jobs (May 2026); LinkedIn recruiter and jobseeker research, via People Management (January 2026) and industry reporting (2026); Robert Half, Job Optimism Survey (December 2025); StandOut CV / SmartRecruiters time-to-hire data via NatWest Mentor (2025).

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