In the credit crisis blame game, ratings agencies drew almost as much as flak as investment banks.
But the mission hasn't changed at Moody's Corp. and with a rash of new bond issuers across the world, demand for its services is running high.
Despite two rounds of layoffs, the company has swelled its ranks by 20% to almost 4,300 since the end of 2007 through a combination of hiring and acquisitions, according to documents filed with the Securities and Exchange Commission.
FINS.com sat down with Lisa Westlake, chief human resources officer at Moody's, to discuss growth of the company's bespoke services, poaching among the Big Three ratings agencies and whether criticism over the crisis hurt recruiting.
Related: Credit Analysts in Demand in 2011 | What It Takes to Become a Credit Analyst
Kyle Stock: Moody's and other ratings agencies were criticized a lot in the wake of the crisis, has that made recruiting more difficult?
Lisa Westlake: We've asked the same question to recruiters we've hired or retained and they tell us no -- that people who understand Moody's and the Moody's brand are still attracted to it and believe in it. That's enabled us to continue to hire through a lot of the media attention we've received.
KS: How would you describe the culture at Moody's?
LW: Collaborative. It's very team-oriented. We have very high standards. The folks on the analytics side are particularly client-focused.
Beyond that, it's a very pleasant place to be. People treat each other well and that comes from the collaborative environment that we have. It's also a great place for people who want to provide a service to the general marketplace. Many of the people who work here really take their roles very seriously in terms of helping investors make decisions.
KS: Any idea of how that culture might differ from Fitch or Standard & Poors?
LW: Not really. Since the industry is so small we try to stay out of each others' backyards.
KS: What can we expect to see in terms of hiring in the next few months?
LW: I'm a bit hampered in terms of what I can say, because we haven't released our quarterly earnings yet, but I'm expecting very much of the same, that we've seen in the past two years. We're still very bullish on our businesses.
KS: What's the latest total headcount?
LW: At the end of the third quarter we were at 4,300. We've continued to add headcount through the downturn and we're continuing now that we're coming out the other end. We've been adding to parts of our business that are continuing to grow, particularly to the Moody's Analytics business.
KS: I was planning to ask about that; what exactly does that group do?
LW: Credit analytics, modeling, pro services, training. It's almost a full spectrum of products aimed at people in the credit market. Also, it's the arm of the company that sells the research our ratings folks produce. In the software space, we are really the only provider that has a full platform for clients. We really sell the backbone credit decision systems that banks use.
KS: So what kinds of talent are you looking for in the group?
LW: We're adding different kinds of people. A lot of them are in software development. We're developing our software; we're leveraging a lot of our data that we've generated. But it's a wide spectrum -- software engineers, quality analysts, salespeople, folks to work on the customer service desk and folks that can do kind of bespoke credit analytics for clients.
KS: How about the traditional, credit rating side of the business?
LW: We're adding there as well -- kind of at all layers of the company, but moreso at the more junior levels, what we call associate analyst. We have three levels of associate analysts and people spend quite a few years as associate analyst before they become a full-fledged credit analyst.
KS: How long on average?
LW: Probably six-to-10 years.
KS: And they are training that entire time?
LW: We have a structured program for people who are new coming in in terms of learning how we analyze credit [and] what's important. But we don't just segregate the new folks coming in and say: 'You're going to be training for the next six months.' They do a combination of classroom training and real-world work supporting our analysts.
KS: So what's driving the hiring on the traditional credit ratings side of the business?
LW: It's a combination of a few things. The credit markets in the corporate and financial institutions sector have rebounded quite substantially from the lows of 2009, so there's a lot of deals out there that need to be rated. In short, there's been an increase in the amount of debt issued. In addition, we've been growing the number of what we call mandates, the number of people around the world who are issuing debt is growing.
KS: Some of it is people who are new to the credit markets.
LW: The credit markets in certain parts of the world are not as mature as those in the U.S. or the U.K., so as those credit markets mature, that's a growth opportunity for ratings agencies in general.
KS: Any spots in particular were growth in new issuers has been notable?
LW: Certainly emerging markets -- South America and parts of Asia.
KS: Did the company open any new offices in 2010?
LW: Yes, but not in the rating agency space. We have a few new locations, primarily due to recent acquisitions in Canada.
KS: How does Moody's find talent?
LW: We use a variety of different sourcing channels. I would say up to 30% of people we hire are referrals from internal people who already work here. In addition to that we do several types pf pipelining. We have a fairly active summer internship program, where we bring undergrad and grad students in for a 10-week period. We do campus recruiting. We've gotten a bit more aggressive on our campus recruiting in the past year or so.
We reach out and do retained searches and contingent searches as well.
KS: What's the mix in recruiting in terms of seniority?
LW: I guess it's a little bit of both. We get more churn at the junior levels. Folks come in, they stay three to five years, they get great experience and then they try something else. So we're always kind of hiring those folks.
As the business has grown, we've found the need to hire at higher levels in the company as well. We hired four folks at the managing director level here last year.
KS: Do the major ratings agencies often hire from each other?
LW: It happens, but there's not as much of that as you might expect. I don't see any of the three actively looking to steal people. I would say the rating agencies are more often poached by others.
KS: Since the start of the crisis, have you seen more candidates from other areas of finance?
LW: We've always seen folks from across various areas in finance, so I don't know that there's been a significant shift in terms of who is interested in working at Moody's. Certainly during the crisis, when more people were out of work, we saw a similar increase in level of interest.
KS: How has your recruiting strategy changed since the crisis?
LW: We've tried to do more active pipelining. We're ensuring we know where the talent is, and who they are. What we've found is that if we maintain a relationship we may benefit in the future.
KS: A lot of companies are building up credit rating capabilities. Is the market for good analysts getting tighter?
LW: I would say there is more competition, so I guess the answer to your question is yes. We're seeing more candidates with multiple (job) offers.
KS: What advice would you have for someone looking to join the firm?
LW: Go to Moodys.jobs and see what we have out there. I would have them reach out even on an exploratory basis, which would certainly necessitate a well-written resume. We look for people that have credit market experience or more broadly financial service experience. We look for people who can think and who can articulate those opinions well.
Write to Kyle Stock
Related: Credit Analysts in Demand in 2011 | What It Takes to Become a Credit Analyst