Is the pendulum beginning to swing back toward a candidate-driven job market? Wall Street compensation consultant Alan Johnson thinks so.
He predicts financial services hiring will accelerate in the first half of 2010 and will give new life to "transferrable skills" - a widely used euphemism for a professional's capacity to enter a market sector or function in which the job-seeker lacks direct experience.
With a broad range of financial activities expected to perform better next year, market professionals could enjoy access to broader set of potential opportunities, Johnson, managing director of Johnson Associates, says in a recent presentation. There'll be greater mobility across employers, business sizes and even product offerings. Within investment banking, selective hiring is already evident and firms are beginning to take advantage of the available talent pool. He says next year will be better, mostly in the second half, due to pent-up transactions as capital markets return closer to normal.
So financial employers who think 2009's low employee turnover will continue in the new year are "complacent," in Johnson's view. Besides last year's broadly lower incentive compensation, he cites delayed impact from "morale killers" - vanishing workplace amenities ranging from the trivial (sodas in the kitchen) to conspicuous items like training, benefits and car service. Disenchantment is fueled by feelings of reduced opportunity and increased fatigue, rather than only compensation.
Creative Ways to Reward Staff
Still, compensation remains the industry's alpha and omega. Johnson suggests even institutions or groups that performed poorly this year may provide generous year-end incentives and 2010 programs in an effort to shore up morale and loyalty among their best players.
Of course, rewarding staff while under Washington's stern eye takes creativity. Some hints the direction that creativity might take can be found in a Bloomberg News story published Monday.
Large banks could channel a portion of their bonus pool into a new business unit devoted to a politically popular activity, such as small business lending. Employees would get stakes in the venture and could be paid years later from its eventual profits, Peter Weinberg, a co-founder of advisory boutique Perella Weinberg Partners and a former international executive at Goldman Sachs, said at a Bloomberg-sponsored forum last week. "You're not taking away compensation that arguably was due to them, but what you're doing is you're adding risk to it," Weinberg said.
Credit Suisse took a different tack last year when it paid a portion of bonuses in the form of stakes in a pool of troubled assets such as leveraged loans and commercial mortgage-backed securities. (Citing an unnamed source, Bloomberg says that asset pool gained 17 percent this year through August.)