By Jack Kelly
If you work on Wall Street, be prepared for change. To be fair, I should expand upon this; change is the only constant in the current corporate climate.
With the rapid wild-fire growth of technology, artificial intelligence, off shoring of jobs, and job transference to less expensive locations, we no longer have the same feeling of job security that our parents had. The days of putting in 20 years at a company, being appreciated, getting a gold watch, and retiring are over.
Companies don’t offer pensions and you are on your own to provide for your golden years. It is exceedingly rare for a person to stay at a company for more than three to five years. The corporate world is like modern-day sports; it’s a free- agent type of economy. Just as a baseball player will happily join another team when their contract expires for a bigger pay day, or the general manager trades a player to another team, we are in similar positions. Well, there is one major difference: most of us aren’t earning $100 million-plus contracts.
This week, we wrote about Wall Street jobs being moved out of New York to lower cost cities- placing downward pressure on the compensation of remaining employees.
There has been a steady and gaining trend for Wall Street firms- that have historically made New York their home- to move large portions of their employees to other cities in cost-cutting efforts.
The trend started after September 11th, when banks recognized the risks of literally clustering closely together on Wall Street. They started moving employees to Midtown Manhattan and Jersey City, New Jersey. Recognizing that investors and clients couldn’t care less that their investment banks were not on Wall Street itself, it promoted the banks to move further away from the high taxes, expensive real estate, high rents, and bigger salaries that prevail in New York.
Goldman Sachs established a sizeable hub in Salt Lake City, Deutsche Bank expanded in Jacksonville, Florida, Citi has moved people to Delaware, Texas and Florida, Morgan Stanley to Baltimore, Credit Suisse has a group in Raleigh, HSBC shuffled people up to Buffalo, and the list goes on and on.
It is the same with non-financial companies. Relocating jobs is no longer a threat, but a reality. With this backdrop, it is easier for corporations to keep compensation down. If a person pushes too hard for more money, it is easy for the bank to consider moving the person’s job elsewhere. Put aside the coercive nature of that dynamic, management will consider phasing out higher-paid people and place the job in a lower-cost location. With that reality, who is going to campaign hard for more money? This is especially helpful for management when other firms are doing the same thing. So, if you work for “Bank A” and they have relocated people, “Bank B” and “C” are doing the very same thing.
Banks will have challenges. As an Executive Recruiter that places people nationwide, it is extremely hard to find top-talent in certain cities that don’t have a large pool of people to draw from. The companies will either have to settle for junior people and train them or bear the expenses of paying people to relocate.
On the positive side, these changes can be liberating. You no longer have to feel the pressure to stay in a job you hate. The stigma of leaving after a year or two is gone. Statistics reflect that people now have 5-10- plus different jobs over the span of their careers. They also change careers often too.
There are bright spots of growth, including the emergence of FinTech and cryptocurrency-oriented companies. When one door closes, another door opens. We live in a dynamic time of great innovation that, while it may harm some careers, could open up fantastic opportunities for many.
My suggestion is that you must keep vigilant of new opportunities and the changes occurring. Never get complacent. Keep learning new skills. Network with associates or people outside of your core circle of friends, so that you can be exposed to new ideas and possibilities. Constantly reposition or reinvent yourself. Yes, it is a little scarier than staying in the comfort zone of being with the same firm for your entire career, but the upside opportunities could be endless.