Financial services

Latin American investment banking: Four questions that will help firms attract the talent they need

As competition for talent heats up, investment banks will find themselves under pressure to offer more competitive compensation packages to attract and retain skilled professionals. Firms that focus on the broader talent value proposition will likely have an advantage.

 

By Gabriela Rocha and Carlos Vazquez

Over the past few years, compensation trends at Latin American investment banks have mirrored a broader trend of retrenchment and caution within the global financial industry as leaders have weathered economic volatility, regulatory pressures, and geopolitical uncertainties. In Latin America, we are seeing a decrease of total compensation from 2021 to 2023 that averages a 20% to 28% reduction in such period for directors and managing directors, and a decrease of 13% to 15% for vice presidents.1

However, there are signs that the tide is turning. One notable development is the reentry of European and American bulge bracket banks into the Latin American market. This move not only signals renewed confidence in the region's economic prospects but also is likely to lead to higher compensation levels as banks vie for top talent to capitalize on new opportunities. Additionally, increasing instances of nearshoring have been driving growth in adjacent sectors that compete for similar pools of talent, such as the Latin American banking sector and the infrastructure and energy private equity sector. 

These developments are also creating more demand for a wide range of roles, particularly in areas such as technology, finance, and general management. 

As competition for talent heats up, investment banks will find themselves under pressure to offer more competitive compensation packages to attract and retain skilled professionals. And that may not be enough. Firms that focus on the broader talent value proposition—putting together the right teams and being transparent about promotion and succession opportunities, for example—will likely have an advantage. 

Why banks should focus on the broader talent value proposition

Banking and HR leaders can give their firms the best chance of success by being able to answer the following four questions executives are asking as they evaluate Latin American investment banks.

  1. Are they in it for the long haul? Latin America can be volatile and banks that have taken a long-term view of the market will be best able to attract and retain talent. We have seen many American and local banks, for example, that are steadfast in their commitment to remaining in market. Even during prolonged economic downturns, they are developing leaders, compensating employees well, and making adjustments to remain in market. While some candidates may be drawn to an exceptional leader or especially attractive assignments regardless of a bank’s history in market, others will be warier.  
  2. How well do they support individuals’ development goals? Banks should consider the professional experiences and skillsets people may want to acquire and how the bank can support those aims. For many, it may be working abroad or expanding their roles. If employees don’t think opportunities exist in their current positions, they may look to competing banks or companies in related industries such as private equity and fintech to find those opportunities. And offering such opportunities not only helps firms remain competitive for talent and foster good will, but also build a more robust and diverse leadership pipeline that will benefit the entire bank. The experiences and international exposure individuals acquire while working abroad or leading broader teams, strengthen their qualifications and often produce more diverse, creative thinking. They expand their networks and may attract more talent to join their organizations as well.
  3. Is there a clear path to promotion and leadership? Candidates and employees will seek transparency regarding opportunities and processes for promotion and succession. For example, banks may have a comprehensive leadership assessment process that evaluates the strengths, development areas, and potential of managing directors, leading to individualized development plans for each director candidate. Being transparent about that process will reassure people that there is a fair and thoughtful path to growth. Having such a process, both demonstrates the bank’s commitment to leadership development and creates talent pipelines of senior leaders who are ready to step into new roles when needed.
  4. Are they focused on building strong teams? Junior and senior leaders both place an emphasis on teams. Both understand how critical it is to be part of an effective team and, in the case of senior leaders, to have strong teams below them. They know that is what makes them successful individually and as leaders. Senior leaders considering an employment offer at an investment bank will want opportunities to shape and build, or even rebuild, their team in the respective country. They may want to bring their own people on board and will expect that organizations support them if/when they implement changes. Junior candidates, in turn, are going to want to work for—and will follow—senior leaders who are top performers, build strong teams, and keep them engaged with interesting assignments and mentorship.

As the Latin American market heats up and investment banks in the region look to attract and retain talent, compensation will increase. This is critical for banks to remain competitive; however, investment banks also must demonstrate their commitment to remaining in market long-term, provide bespoke career growth opportunities, and create environments and roadmaps that foster strong leaders empowered to build exceptional teams. This presents a positive feedback loop: People want to work where there are opportunities to succeed and for senior leaders who are exceptional at what they do and how they lead.

Reference

1 Heidrick & Struggles’ internal data.

About the authors
Gabriela Rocha
Gabriela is a principal in Heidrick & Struggles’ Miami office and a member of the global Financial Services and CEO & Board of Directors practices.
Carlos Vazquez
Carlos is is the partner in charge of Heidrick & Struggles’ Mexico offices and a member of the CEO & Board of Directors, Financial Services, Consumer, and Private Equity practices.