Re: Getting an Investment Banking Job
SIX MONTHS AGO, it was forecast that the credit crisis would cost 6,500 City jobs. That figure rose to 10,000, then 20,000 and JP Morgan Chase has now revised its prediction to 40,000.
Reports of cuts by Citigroup, Merrill Lynch and UBS are now headline news, but it is believed a host of City firms are preparing to cull. It has been seven years since collective City redundancies were seen on this scale.
There is little public sympathy for City workers, whose annual bonuses are commonly five times the average national wage. Online discussion forums feature comments like “suck it up boys and girls”. Joe Public seems to see City employees as the architects of their own woes – worse, woes that may yet envelop Joe Public.
The Chartered Institute of Personnel and Development (CIPD) recently reported that the number of companies intending to make employees redundant had doubled since last autumn.
Can City employees expect any kindness from their employers as they wield the axe? Perhaps not. The general view is that, in sacking mode, the City can be brutal.
“In 2001 [when the dotcom bubble burst], one big investment bank separated staff as they arrived for work,” said Michael Moran, chief executive of outplacement firm Fairplace. “People were asked to go to the right or left and those who went to the left found themselves in the black bin-bag line.” Accompanied by security guards, they were given only minutes to clear their desks before being escorted from the building.
As Moran points out, it wasn’t exactly text-book redundancy implementation. And there was no HR trophy either for the City company that botched its redundancy timetable so badly that employees found out they were for the chop when their log-ins no longer got them on the company’s computer system.
Sacking large numbers of employees is never going to be pleasant, but what should culling companies keep in mind if they want to salvage their brand and reputation?
“Companies have to treat people with respect and dignity,” said Moran. “It’s a fact of economic life that markets grow and also decline, but organisations have to treat those they are making redundant well or else those people leave and tell everyone how nasty the company was.”
Moran points out that an uncaring reputation doesn’t help with retention – surviving staff will be angry at the treatment of former colleagues and conclude that the company may well treat them the same way.
Moran argues that bringing in an outplacement firm to support workers after they get the bad news and in finding new jobs shows some level of concern for staff.
“After that, it is about how much money a company wants to spend,” he said, adding that American investment banks tended to want to do outplacement on the cheap while European banks were prepared to spend more money.
So some banks only paid for very basic help – for example, the updating of CVs – while others funded one-to-one coaching to prop up battered self-confi-dence and also offered sustained support such as coaching on interview techniques.
Moran argues that a “good” redundancy programme requires military-style planning. “You have to consider things like the layout of the office,” he said. “If people being made redundant are to be called to a particular office, you don’t want them to have to walk past the dealing floor to get to it. You also have to identify staff that are likely to take dismissal particularly badly.”
David Buick, partner with broker BGC and, at 64, a rare and very seasoned City observer, said that despite new age-discrimination legislation, this downturn, like every other, was a chance for investment banks to unload expensive, older workers and replace them with a fresh intake.
“The life span of the average City worker is 24-40,” he said. “So the attitude tends to be make hay while the sun shines. These people have been willing to live by the sword and are more than happy to die by it.”
Olwyn Burgess at HR consul-tancy Chuimento, said it was a misconception that City workers accepted that one day it would be their turn. “It still knocks some people for six,” she said.
Those that can’t get back in, often pine for months for the adrenaline-powered, fast-paced City job. A few can’t even face telling the family that the high living might be over – “they often have all their kids at private school, a large house, several cars in the drive”. She said the sacked City worker who continued to get up at 5am and take the commuter train to London was not an urban myth.
“It is rare but I’ve come across it,” said Burgess. “Initially they think they will get a new job very quickly and so they deceive their spouse. We are often on site when the bad news is broken to people and that’s often the first thing someone who has been dismissed worries about.” Former City high-flyer George, a father of three in his mid-thirties, continued to get up at 6.00am for months after he was made redundant from an investment bank in 2003.
He wasn’t deceiving his wife that he still had a City job: it was just what he had become used to. He now admits that in the early days he missed his City job – and his six-figure salary and annual six-figure bonus. However, he said he has found that there is life after investment banking.
George now runs his own business, fourleafcloverperfume.com , offering US$29 items that may help people get lucky in life.
“The fact is that the money you earn in the City can become a pair of handcuffs,” he said. “Working there, you don’t get a sense of making a difference, of any meaning. It’s all about moving money round. For many people that is not inspiration enough to get out of bed every morning.”
In the six years since he left the City, George has helped many people by giving free financial career talks and gave people hopes of getting lucky through his small business. “I have found so much more satisfaction in running my own business and getting feedback from customers who got lucky in work or in life,” he said. “And my life is much better – it’s happier and it’s healthier even though i earn much less than i used to.”
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