Even under the darkest of dark clouds, there is always a silver lining. For financial sector recruiters watching their industry be put through the ringer in recent days, the good news is the level of talent available and willing to exchange high compensation for job security and a better quality of life.
“If you are in a position to hire, what a fabulous time to do it,” said Michael Shanahan, senior partner in the Boston office of The Boston Consulting Group.
Lehman Brothers is defunct. Merrill Lynch was sold. Fannie Mae and Freddie Mac were seized by the government. With events like these, it’s easy to forget that many in the sector are doing fine. “Companies in the $500 million to $3 billion mid-market range are having their best year ever,” reported Eryn Emerich, partner at Bell Oaks, a national executive search firm based in Atlanta, who recruits for the industry.
“Retail and regional banks are in a strong position to move [on talent acquisition], as are some of the smaller investment banks and boutique firms,” added Shanahan. “Those who remain strong and relatively stable through the maelstrom should proactively recruit some fresh talent.”
And they have. Robert Graber, founder of WallStJobs.com in New York, has seen a 25 percent to 30 percent uptick in the number of companies posting financial services jobs from a wider geographical range. “We just had a company in Denver post a job for an investment banker, looking to take advantage of the turmoil and get these people.”
Even large banks like Wachovia, Bank of America and JPMorgan Chase are pouncing on the opportunity to tap key talent, according to Greg Coleman, managing director of executive search firm Korn/Ferry in New York.
Quality of Candidates
The financial sector layoffs of late are not of the same ilk as the right-sizing that occurs regularly in any industry. “This is not the bottom 10 percent [of the workforce] that nobody wants,” said Coleman. “These are good people from the top down.”
Roughly 103,000 financial services jobs have been cut since January, according to outplacement firm Challenger, Gray & Christmas, with another estimated 50,000 people out of Lehman Brothers and Merrill Lynch. The glut of talent on the streets means that smaller companies can afford to buy talent previously out of their price range. It’s like being in the market for a new home and suddenly being able to afford the ritzy neighborhood.
“Clients are saying, ‘Here are our dream candidates, are they available? Are they interested?’” said Emerich. “My advice to HR is to stretch your search parameters to see who you can get in this market.”
Without a job or a company to report to, Wall Street workers who averaged nearly $400,000 in 2007, according to Bloomberg, are lowering their compensation expectations even more after Bear Sterns & Co. collapsed in May 2008, say headhunters. “With the recent development of investment firms Goldman Sachs and Morgan Stanley becoming bank holding companies, the expectations will go even lower for these professionals,” said Graber. He explained that these former investment firms will begin to offer salaries with base compensation plus bonuses rather than a heavily commission-based structure that was high risk and high reward.
As the compensation structure changes at Goldman Sachs and Morgan Stanley take hold, Graber says, there will be more exits from top performers who are looking for the upside of commission-based salaries. “People will leave [Goldman and Morgan Stanley] for a private equity firm or a small bank doing investing or a hedge firm,” he said.
In the long term, though, financial sector shortages are still predicted because of demographic changes, according to Shanahan. The financial market instability will only exacerbate the problem as new graduates begin to look elsewhere. “Recruitment interest [in finance jobs] on college campuses is down, and attendance at career fairs is down,” said Shanahan.
Uncertainty in the financial sector is the main reason for the dropped interest. “A candidate has to consider whether the company will be around for long. Never before have both job security and the security of the company been in question with such traumatic intensity,” he said.
But demand for financial services isn’t going to stop. “When the smoke settles, there will be new structures and new regulations, but there will always be financial services products as well as the need for talent in those areas,” said Shanahan.
Now is a good time, if you can, to step back and evaluate your workforce planning. “Smart investors invest when the market is down, and they do see this as a great time to attract candidates from competitors,” said Emerich.
Where to find candidates:
• Niche online job boards like WallStJobs.com, BankingandFinanceCrossing.com and eFinancialCareers.com.
• Company pages on Facebook, LinkedIn and MySpace.
• Executive search firms.
• Outplacement firms like Lee Hecht Harrison, Challenger Gray & Christmas and Right Management Consultants.
How to reel them in:
• Promote company stability, growth and liquidity.
• Stress quality of life and cost of living in your community.
• Create or improve work/life balance programs that offer flexible schedules.
• Offer relocation packages.
• Communicate career growth opportunities.
Adrienne Fox is a freelance writer in Alexandria, Va., and former managing editor of HR Magazine.