Headhunter firm's report touches on wealth-, asset-management hiring trends. With its stock down 70% for the calendar year, Goldman Sachs' top executives have decided to forego their 2008 bonuses. Citigroup, its market capitalization lower by about the same amount, is set to shed 53,000 employees on top of the 22,000 positions it pledged to eliminate last month.

While these major-firm moves dominate the headlines today, financial-service companies are making subtler and more pervasive changes in reaction to the crisis gripping the industry, according to executive recruiting firm Russell Reynolds Associates.

CEO turnover

"The financial crisis has put the spotlight on leadership," says Cornelia Kiley, a managing director in New York-based Russell Reynolds' asset- and wealth-management practice. "Boards are looking for visionary leaders who can re-energize their teams, restore the confidence of their clients and shareholders, and lay the groundwork for future growth."

Firms are replacing top managers to restore shareholder and client confidence, to recover from bad bets on subprime mortgages or to gear up to weather one of the harshest business climates ever seen, Russell Reynolds says in the wealth- and asset-management edition of its 2008 Recruiting Trends report.

And these changes -- inevitably seeping into second- and third- tier management levels as new CEOs install their own teams -- will continue as boards grow increasingly impatient with underperforming managers.

Russell Reynolds identifies several other recruiting trends.

With equity markets deep in bear territory, Russell Reynolds also sees a sharp drop in demand for active portfolio managers as investors take passive positions to maintain equity-market exposure. Credit portfolio managers, on the other hand, will be in demand -- especially among firms that have skirted the worst of the recent blowups. Private-equity have adopted a "wait and see" stance, though there's been some hiring for distressed-enterprise and mezzanine-debt professionals. Similarly, real-estate firms have been raising capital around distressed opportunities but the talent needed to restructure assets and portfolios is in very short supply. The need for risk-management, legal and compliance professionals has escalated with the continued volatility and anticipated changes in the regulatory environment. Technology and operations executives who can anticipate the changing regulatory and compliance landscape and serve as proactive leaders within their organizations continue to be in demand.

"Forward-thinking firms are using the opportunity presented by the uncertain environment to upgrade talent and gain share," says Russell Reynolds managing director Deb Brown. "Strategic hiring, re-priced talent and recruiting individuals previously unattainable will redefine the landscape and determine what the investment industry will look like a decade from now." -FWR

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