Just when it seemed the hiring and compensation outlook was about as ugly as could be, things suddenly got much worse.
Barclays picking up most of Lehman Brothers' U.S. operation may avert the kind of wholesale layoffs that followed the distress sale of Bear Stearns a few months back. Still, the events of the past week put an exclamation point on the vulnerability of the global finance industry's leading corporate pillars.
No one is safe now. Suddenly embedded in decision-makers' DNA, that principle augurs more mergers for survival and makes caution the watchword when setting this year's bonus payouts and next year's budgets. Bonuses are all about retention, but the very concept of "retention" is on course to be branded anachronistic, even toxic - much like other once-popular phenomena like cigarettes and auction rate securities.
What can a mid-career finance professional do, when he's been or is about to be let go? Many will counsel switching careers or industries. If you ask me, leaving banking now is akin to selling at the bottom. Still, candidates who remain in finance need to modify their strategy. Here are some thoughts.
Don't Be a Panic Seller
The media are full of wailing about bleak re-employment prospects for laid-off bankers and other Wall Streeters. You'd never overhaul your investments based on views that Joe Six-Pack heard on TV and then parroted at the barber shop the next day. Overhauling your career based on the bleating of the herd makes even less sense. Any major career move should come out of calm reflection about your personal situation, wishes and needs. Take your time, make a plan, re-connect with former colleagues and other associates, and consider engaging a career counselor.
Yeah, it's easy for me to say "don't panic," since I have a job. But the memory of my own layoff experience two years ago remains fresh - as do the wounds, financial and otherwise.
Go Where the Action Is
Smaller firms and boutiques - both sell-side and buy-side - are trawling for candidates right now. Bulge-brackets are not.
eFinancialCareers News's industry contacts say C.L. King, Jefferies, Collins Stewart, and B. Riley have all hired equity research analysts lately. Other recent reports note hiring by New York-based Moelis & Co. (buyouts, restructuring and M&A), and London-based Fenchurch Advisory Partners (financial institutions group bankers).
An article in Thursday's Wall Street Journal relayed this interesting statistic from a rival job board: Postings from small and middle-market firms jumped more than 25 percent on Monday, the same day Lehman filed for bankruptcy protection and Bank of America announced a deal to buy Merrill Lynch.
The Journal cited three boutique investment banks that are hiring. Gerstein, Fisher & Associates is seeking expertise in business development, relationship management, analysis, research, trading and operations. The New York-based firm reportedly plans to add as many as 25 people over the next 12 months, almost doubling its present staff. Kaufman Brothers, also based in New York, increased its job postings this week. And Irvine, Calif.-based Johnson Capital wants people for a two-month-old distress-services division in Denver "that can create value and take advantage of distress," its president said.
Meanwhile, those few global powerhouses that were hiring in the U.S. - such as Barclays - are likely to refocus on buying entire firms or business units.
Go In With Your Eyes Open
The ongoing crisis is a much-needed reminder that job candidates must perform due diligence before casting their lot with any employer. This has always been true. But with bodies suddenly littering the landscape, it's more vital than ever.
Even more than a bulge-bracket, a small, privately held firm that appears to be prospering today could become road kill tomorrow. This isn't a reason to avoid smaller employers - only to pull out all the stops when checking them out. Don't stop with delving into financial reports and news stories about the company. Try to speak with customers, prospective colleagues, and recently departed employees. A full-bore research effort will both help you get an offer - "Do your homework" often tops lists of pre-interview pointers - and alert you before it's too late if you ought to walk away from that employer.