With taxes, labor costs and real estate expenses so high in New York City, more financial jobs are being bundled up and shipped from Wall Street to less expensive locations, creating opportunities for job seekers in cities around the country. The shift comes amid banks considering deep staff cuts and moving jobs to less expensive regions. The strategy not only saves the firms money, but in many cases is saving the actual jobs themselves.
For an industry that has experimented extensively with offshore outsourcing in the past, this trend of "near-sourcing," or keeping the jobs in this country, is yet another phase in its evolution and is by no means unprecedented. Many of the credit card companies and several brokerage houses have had their call centers in lower-cost areas for years, placing these back office services in places such as North and South Dakota, Missouri and Iowa, among others. Some Wall Street jobs have also been relocated to lower-cost regions in states that include Georgia, Delaware and Utah, a trend we reported on back in 2011.
Over the past five years, while New York has shed more than 21,000 jobs in the financial industry, Arizona has added more than 2,500 securities jobs; Delaware, 1,300. And in April, Delaware pledged to pay $10.1 million in incentives to JPMorgan Chase for moving 1,200 more positions there.
Texas, Utah, Virginia
According to an annual study with metrics developed by National Association of Manufacturers and the Council on Competitiveness, Texas, Utah and Virginia are the top three states in terms of the cost of doing business. While the Lone Star State has not yet replaced the Alamo with a block of investment banks, its corporate growth has created demand for financial expertise and analysis at firms like Starbucks, Boeing or TI.
New York is certainly in no danger of losing its leadership position in the financial world, however, firms like Deutsche Bank, Goldman Sachs and Credit Suisse have begun reducing their overhead by moving trading, accounting, legal and even human resources to “bargain belt” areas including Salt Lake City, Utah; Raleigh-Durham, North Carolina; Jacksonville, Florida and Dallas, Texas.
A third of Goldman new hires outside New York
Since last year, more than a third of Goldman’s new hires have been outside New York. With looser regulation and lower taxes than New York, Utah has been a particular target of growth for Goldman, who stands to rake in tens of millions of dollars from the state for sending jobs there.
With so many of these middle-tier positions on Wall Street, many analysts expect this trend to continue. Keep your eyes open and your resume ready. In the near future, those Wall Street jobs may soon be coming to a town near you.