Industry Shake-Up Sparks Career U-Turns
Jessi Walter loved her job as vice president of credit strategy at Bear Stearns. The work was interesting, she enjoyed her colleagues, and she was well compensated.
But she also loved cooking with her boyfriend's two young nieces.
In June, when Walter, 27, found herself one of the 10,000 people laid off after Bear Stearns was acquired by JPMorganChase, she didn't panic. She started a business.
Cupcake Kids!, which provides cooking events for children, was born in the two months preceding the arrival of Walter's proverbial pink slip, a period when she joined "everyone else, watching the events on the news."
Today, everyone on Wall Street is still watching the events on the news. With major banks, mortgage companies and insurers in crisis mode, those working in finance can't help but wonder about their careers going forward. Undoubtedly, many are thinking of change, says career consultant Paula Kosin.
"Sometimes people who have been making good money and are in a good work situation - but don't really enjoy it - go along with the flow. They don't have any reason to make a career change," Kosin explains. "For some, it can be devastating to be out of work. For others, such situations present an opportunity of a lifetime."
The Educational Detour Option
In fact, many Wall Street professionals are seeking out new career directions, even if they currently have jobs.
Scott Shrum, director of admission consulting research for Veritas Prep, a leading GMAT prep and MBA admissions consulting firm, says in the past week alone he has seen the percentage of inquiries from people in financial services surge from 30 percent to 60 percent. The number of those with e-mail addresses from Bear Stearns and Lehman Brothers has tripled.
Some of these people had planned to attend business school in several years, and a layoff or bleak job market inspired them to accelerate their plans. Others, however, have seen the crisis as an opportunity to pursue paths entirely outside of Wall Street. Social entrepreneurship tops the list.
"Every year we meet people who say they want to" start a socially conscious business or non-profit, and "sometimes it feels like they're just paying it lip service," Shrum says. "After all, it's hard to turn down a $200,000 Wall Street job when you're 25. Now they realize their job may go away, and in two years, after business school, there may not be one there for their taking. They see this as an opportunity to do what they always wanted."
Transferring Skills to a Related Sector
Others are playing it safer, hoping to transfer an investment banking specialty into a related private equity job. Robert Baron, president of American Real Estate Executive Search, has fielded three times his office's normal number of inquiries, many coming from nervous bankers wanting to ensure their continued employment.
Baron's clients have mixed feelings about these prospective hires. "Everybody likes the skill set, and the feeling that the best and brightest went into investment banking," he says. "The risk is they're just there to weather the storm, and as soon as the market comes back they'll go back to banking, which generally pays more."
Others hope to use their skills to branch off on their own. In the week following Sept. 15, Schwab Institutional saw a 200 percent increase in call volume from brokers and traders interested in opening their own independent financial advisor companies. This is the second surge in recent months: The first followed the sale of Bear Stearns to JPMorgan Chase.
While some financial experts predict the banking and credit crisis calls for a shrinking of the financial services sector, Schwab Institutional reported $9.4 billion net revenue from newly independent advisors for the first half of 2008 - three times higher than the same period of 2007.
Before You Leap, Plan
Paula Kosin warns the newly unemployed to take a step back before launching an entirely new career or business. She also advises everyone to always have "plans B, C and D" for their careers. After decades of layoffs across the economic spectrum, no one should be surprised when an employment crisis hits their industry, she says.
"No matter how secure your situation seems, always think about what you would do if something comes up," Kosin suggests. "Truck drivers have a saying that you 'drive in the ditches.' That means you should always stay alert so that if something happens up ahead on the highway, you have an escape route. That can be a lifesaving move."
As for Jessi Walter, she may return to finance some day, but for now she's passionate about her new venture. "I really did enjoy my job, but I wasn't psyched about any of the positions I heard about when I talked to headhunters," she says.
She was psyched, however, about the kids' cooking classes she'd been throwing for nominal fees. She sat down and realized her hobby was a viable business. Today Walter says she works more hours getting her upstart off the ground than she did in investment banking. "If I wanted to go back to finance, I'm hopeful there would be a place for me," she says. "But to be honest, I don't think about it on a given day."