San Francisco, California, USA, September 2008
Sectors under Stress
Of the six distinct areas that Stanton Chase classifies within Financial Services, three are certainly in distress: Wholesale Banking, Consumer Banking, and Real Estate. Erosion of credit quality, inadequate capitalization, and asset deterioration are the major stresses. Many highly skilled and credentialed employees are tossed onto the job market when organizational failures or mergers disrupt their careers. One of our boutique i-banking clients reported receiving 5-10 resumes a day from global investment bank employees looking for a safer place to work.
The Continued Silver Lining
The integration challenges that result from combining companies such as Bear Stearns with JP Morgan, and Countrywide with Bank of America, and the U.S. government conservatorship of Freddie Mac and Fannie Mae, and the possible sale/demise of Lehman Bros. will surely provide another opportunity to pick up top talent for quick-thinking and responding organizations.
The Growth Sectors
Of our remaining Financial Services sub sectors: Investment Banking, Private Banking/Asset & Wealth Management, and Insurance, there are glimmers of light, and in some cases, a very solid foundation for business for the foreseeable year or two. Our San Francisco office is experiencing a trend of increased search assignments for Chief Investment Officers, Wealth Managers, and brokerage industry executives, with some clients that are interested in hiring whole teams of registered investment advisors.
As reported by Jim Piper, Director, San Francisco, former North American Financial Services Practice Leader: "Because of the continuing volatility in domestic and global equity and foreign exchange markets, proprietary trading firms, market makers and bank dealers focused on these markets are having good years. And while the third and fourth quarters of 2008 are likely to see substantial hedge fund redemptions, particularly in fixed income and energy-related funds, many of those funds offering long/short and market neutral equity products continue to gather assets." For them, Volatility + Volume = Profits.
Domain Knowledge Needed
Companies are repositioning their human-capital portfolio, and are fighting back in the ongoing 'War for Talent' at the leadership levels. Asset management firms are eager for highly credentialed and well- seasoned money managers, for example.
Land, Labor, and Capital
As we witness the roller coaster ride and fluctuating health of banks, brokerage firms, investment banks and lenders, with the Federal Reserve and Federal Government discussing nationalizing our free market system, we are embarking on uncharted waters. Executive teams are looking for solid footing in the market and the ability to commit to their future strategies. Companies want to build on their brands or build market share, shift their Financial Capital to match future market opportunities, and in turn match Human Capital to their resulting new business strategies.
The Pony in the Room
As financial service companies assess their current and future human capital, experienced executives, skilled professionals, and even search consultants will be in high demand. The caveat is that the pool of companies doing so will be smaller than it was one year ago. As beacons in the human capital market, we will guide companies through the turbulent waters of repositioning their human assets in Wholesale and Retail Banking, Insurance, and Mortgage Lending. We will also continue to divert resources into the expanding and competitive sub sectors of Private Banking, Asset & Wealth Management, and Brokerage Services. We encourage you to be quick thinking and responsive to the changes in the marketplace to capitalize on those changes and come out ahead. Call us to discuss your human-capital strategies today.
Contact
Paul K. Herrerias
Managing Director, and North America Regional Practice Leader - Financial Services (San Francisco)
Office: +1 415-398-1001
p.herrerias@stantonchase.com
