The financial crisis of 2007/8 precipitated the mass exodus of thousands from the banking sector. The aftermath required radical restructurings of balance sheets and org charts. But the worst hasn’t passed. There’s an even bigger threat to financial sector jobs that no amount of restructuring, improved liquidity or better governance can address.
Prior to the financial crisis, US investment banking firms were adding jobs at a peak 17% annual rate (December 2006). Those days are long gone, with no signs of them coming back any time soon. Figures for 2014 show just how much investment banking employment has failed to recover:
Of course financial jobs are affected by the economy as a whole, but there’s also a structural brake on the recovery of financial jobs. There are some winners, but more losers. For the previous mainstay of the financial sector workforce – the white middle-aged man – it’s a perfect storm. It arises from the collision of technological advances and employers’ diversity goals to create a workforce demographic that better mirrors the profile of their customers.
Technology is the real reason banks are employing younger and cheaper staff. The work that used to require a senior and experienced team can now increasingly be done with a handful of relative juniors. Provided there’s an adequate investment in the technology to equip them. And to secure the budget for such technological implementations, the business case usually involves headcount reduction.
It doesn’t stop there; there’s an increasing aspiration to ensure that the employee population truly represents the customer base from a gender, ethnicity, disability and sexual orientation perspective. Many banking institutions are now building their recruitment and talent management strategies around such objectives.
The days when financial workers reached retirement age and smoothly transitioned to their generous final salary pension plan seem as anachronistic today as a filofax. How should a senior banking professional respond?
Expect the unexpected
No one can predict who will fall victim to the next strategic reshuffle. Your seniority may even make you more rather than less vulnerable. Removing one senior head can save a lot more cost than a whole team of juniors.
Banking is an industry which has been slow to see the true value of diversity. Now that it has, it’s embracing it with zeal.
Banks now see the value of having a diverse workforce that is more reflective of their customer base. This includes gender, disability, ethnic minority and sexual orientation. Banks have policies and networking support groups to encourage these diverse groups into the organisation and through the pipeline into senior management.
Reality check - if you are 45 and not yet in the C-suite, you’re probably never going to get there. If you are 50 and a CEO, you have just 2-3 years before you reach the average age at which CEOs lose their jobs.
If you are a senior banking professional, your presence in the organization is only an asset if you move with the times, build your own skills set and knowledge and you don’t become complacent.
Plan your own redeployment
You’ve been around for a long time and probably know a lot of people. But do you consciously invest in your personal brand within your network? Do you see your network as a tool to support you merely today or in your future roles?
Don’t stagnate; be a strategic networker. Many fall into the trap of operational networking. This style of networking focuses on the here and now and deals with getting the immediate job done (e.g you often meet up for a coffee with the Finance Business Partner that deals with your department).
A strategic networker plans their own journey and develops their network to build sponsorship. Ask yourself, who will be the key players (both inside and outside your employer’s organization) as the future priorities and challenges arise? Who from this audience should you target as part of your network? Once these stakeholders have been identified be visible, be positive about change, seek it out, volunteer to help with their projects, offer to mentor their junior colleagues and make it your business to become the “go to” person ensuring you build goodwill and demonstrate how your skillset can be transferred.
Rethink where your loyalties should lie
Employers don’t like to talk about this but most abandoned the implied contract with their employees years ago. The idea that if you are loyal to your employer it will provide a job for life is a rarity. You are only as good as your last deliverable!
Still think your loyalty to your employer should be greater than to yourself? Banks pay for your services until the day that you leave their employment. You might like to consider that the “golden handshake” is the point at which any loyalty disappears (not unlike many divorce settlements). Any support after this point is unlikely to ever materialise.
Think about contingency
Bankers routinely expect their business clients to be able to demonstrate that they have risk mitigation strategies in place and disaster recovery plans which will swing into action if their building burns down.
Well now it’s time to walk the talk. If you have no idea what you will do the day after you lose your job, it’s time to wake up and smell the coffee. Okay maybe not the very next day, but certainly after a week or two.
The difference to a normal disaster recovery plan is that resuming your work as before with a different employer may simply not be an option. Or at the very least not an attractive one.
Time to Look in the mirror
When was the last time you evaluated your skill set and knowledge? What are the skills that your company need in two years to meet their strategic goals?
- Are you fleet of foot – do you still have passion for the business or is a just what you’ve always done?
- Do you really understand how digital technology is being used by your customers?
- Do you know who your customers are – and their beliefs and values?
- Are you scanning externally – what are your competitors doing which might be a threat or an opportunity?
- Can you leverage technology to deliver results more effectively?
- Are you on top of new leadership thinking to get great colleague engagement?
- Do you network externally and collaborate with likeminded peers outside the organisation?
These are the default settings that the Milllenials are armed with. Combine these new attitudes and tools with your powerful assets of experience, knowledge and maturity and you have the essential weapons in your fight to prove your current and future relevance and value.
Self-help is key. Evaluate your intellectual, social and capital assets and nurture them BEFORE you need them
Whilst your liquid assets will provide a cushion in the months that follow your job loss, if you wish to avoid career stagnation or even obsolescence, you need to leverage all your assets. And this includes your soft assets. In fact in this situation, your personal network, online profile and ability to engage with people outside your core network are today more critical than ever before.
But social and networking assets outside your current network cannot be built overnight. This is why building them before you need them is essential.
Social media isn’t just something that your kids use. It’s a key tool to build your professional network outside the people you have dealt with in your current and previous jobs. If your Linkedin account is just like a self-updating rolodex to you, then that’s a sure sign you are out of step.
So obsolescence isn’t an automatic outcome if you are over 40 and work in a large financial organization – provided you equip yourself to survive.
Neil Patrick is a former banker and the editor of 40pluscareerguru and blogs about overcoming the career challenges facing baby boomers. You can follow him on Twitter @NewCareerguru.