Careers in investment banks carry a distinct risk premium: you may be earning more money than people outside the industry, but you're also more likely to lose your job.
The latest manifestation of this phenomenon is Goldman Sachs' decision to fire 30 New York-based equity traders in response to greater client demand for electronic trading. There's no shortage of precedents, including Deutsche Bank's announcement of 6,000 job cuts last February, and Merrill Lynch's successful eradication of some 24,000 staff between 2001 and 2003.
So what do you do if you want your banking career to carry on as long as that of Sandy Weill, the Citigroup chairman who started out as a runner on Wall Street in the 1960s? We asked a selection of search consultants and career advisors for advice. Here's what they said:
- Move proactively; build a large rolodex; don't overspecialize too soon. - John Challenger, Challenger Grey & Christmas
John Challenger, chief executive of Challenger Grey & Christmas, the outplacement provider, says you need to recognize you're not going to stay at one organization your whole career. You should move proactively when the right opportunities arise.
While you're working, he says you also need to devote 10% of your time to building a hefty rolodex and doing favours for others. "The more favours you do for other people by connecting them and making things happen, the more favours they'll do for you," he advises.
And he cautions against overspecializing in a small organization too early in your career. "Early on, it's better to be a generalist working for a larger bank," he says. "You'll meet a lot more people and have a broader scope. It's also easier to go from a big organization to a little one than the other way around."
- If you're based in the U.S., work for a U.S.-based firm; anticipate the strategic direction of the company you're working for; watch out for consolidation. - Jay Gaines, Jay Gaines & Co.
If job security is all-important, Jay Gaines, CEO of Jay Gaines & Co., the NYC-based financial services search firm, says Wall Street bankers should think about working for U.S. banks. "When Americans work for non-U.S.-based institutions it's often a much bumpier ride," he says, "Non-U.S. institutions have restructured on U.S. soil many times." By way of example, he points to the likes of UBS, which went through numerous gyrations before reaching its current powerhouse status.
As well as giving up-and-coming European banks a wider than average berth, Gaines advises keeping an eye on your employer's strategic direction. He says, "Look at the institution you're working in, consider its core strengths, and judge whether the area you're in is peripheral to the core." If it is, you could fall prey to business restructuring.
For Gaines, the securest career option is working for a large U.S. bank that won't fall prey to a takeover. "If you work for a top four bank in the U.S., the chances that your organisation will be acquired [and that you'll lose your job as a result] are very low," he says. On the other hand, he warns career progression will be probably slower than at a smaller firm or a fast growing European: "These are crowded places. There's a trade-off between the speed of advancement and lower risk."