Five years of change in Commodities

I have been working within executive search for the past 15 years across Asia Pacific and the Americas region; with a specific focus on the commodity markets over the past 5 years. One of the biggest trends I have seen evolve in the North American market, is companies wanting to partner with subject matter experts when they are looking to hire, rather than engage non-industry specific search firms.

As the need for talented professionals with specific industry knowledge and skillsets has intensified this trend that has only gathered pace. Proco Commodities work across the energy and commodities supply chain. Over the past 5 years we have seen constant demand for our services; building talent pipelines, compensation benchmarking, competitor intelligence and executive search. The markets our clients operate in are cyclical; whilst market fortunes fluctuate, Proco Commodities work across a wide variety of commodities meaning there is always demand for top-tier talent.

Operating within our markets can be challenging as many of our clients are looking for individuals with extremely specialist skillsets. Quite often there are often only a handful of people globally who are qualified for the jobs. Commodity trading is very market and product-specific, therefore, skills are not easily transferable.

We have witnessed several trends in the industry over the past 10 years (in the wake of the global financial crisis) which has significantly impacted the commodities industry. The Dodd-Frank Act, for example, drove a massive need for compliance experts, new trading regulations handed down from the SEC has seen a number of the Investment Banks exit physical commodity trading which has created more opportunities for trading merchants and private equity Funds.

Perhaps the most significant challenge for our clients has been the need to address succession planning in their trading teams. Many of the key industry players have come to rely on extremely capable senior talent that could retire at any point. The demand for capable, next-generation traders who can contribute positive PnL has noticeably increased in recent times.

We have also seen the mobility of candidates increase, as the willingness of US candidates to move between the nation’s various commodity hubs (and internationally) has grown. Globally, China is emerging as a hot commodity market with the demand for talent is growing. Mexico is also growing the market as the government has deregulated the oil and gas industry; which has an influx of foreign investment. Meanwhile, new entrants continue to arrive in the US, with several large European trading firms establishing American operations (and some arrivals from Asia Pacific), all targeting local US talent.

With so much competition in the market, the employer brand is growing in importance, and there is clear prestige attached to the leading players in the market. Negative rumours can make it extremely difficult to recruit, and today it is critical to work closely with a recruitment partner to correctly position your business in the eyes of candidates and to develop and sell your story.

Proco Commodities has had an extremely busy five years across the Americas and I am optimistic about the future. With new entrants continuing to arrive, businesses diversifying, and new products (such as LNG) taking off, we are operating in a positive climate. If President Trump makes good on his promise of repealing or scaling back Dodd-Frank, we may yet see a return of the investment banks to the commodities market, to shake up the talent landscape even further.