Not long ago, the likes of Mercer, Watson Wyatt and Hewitt Associates were doing their best to stem a tide of staff trying to make a beeline for investment banks. But with banks now struggling, consultants now hiring, and some of the staff who left them beating a hasty retreat, it looks distinctly as if consultants are having the last laugh.

“We are growing,” says John Hastings, a partner at Hymans Robertson. “We’ve been successful in winning clients across a number of areas and we’re hiring actuaries, investment consultants, manager researchers, communications staff and various other specialists.”

Advisory work related to the pensions buyout market, is a particular source of hiring. The pensions advisory market shows signs of growing at around 20% this year, and consultants are staffing up accordingly. Charlie Finch, a partner in the buyout practice at Lane Clarke & Peacock, says their team has gone from five to 30 people in the past two years. Another 10 additions are slated in 2008 – although some may be moved internally.

The major consultancy players have also been recruiting. Watson Wyatt recently announced the addition of four staff in London, one of whom came from Natixis. In March, it rehired Keith Jecks, a former senior investment consultant with the firm who’d left for ABN AMRO’s pensions advisory business four years previously.

Hastings says banks that aren’t already well established in the pensions advisory space will need to consider their options: “After Goldman set up their pension practice, a lot of other banks set up me-too operations. In this sort of environment those may not prove viable.”

In the meantime, consultants appear to be taking a softly, softly approach rather than rushing to reclaim all their staff from banks. “There’s not much sign of consultants fighting back for these people yet,” says Iraj Ispahani, head of the financial services business at Korn/Ferry Interrnational.