subject: A View of the Financial Services Landscape from New York [print this page] A View of the Financial Services Landscape from New York
Much in the same way the flow of financial capital into and out of the world's financial centers reflects the potential for return on investment for shareholders, the mobility and movement of human capital continually sets and resets the competitive environment and preordains organizations' financial performance for the very same stakeholders.
The economic tremors manifest in the sub-prime mortgage fallout, the weakness of the U.S. dollar, the credit crunch, a sagging real estate market and the historic collapse of Bear Stearns have rattled investor confidence broadly but impacted the world's most sophisticated financial services center rather unevenly.
Recent workforce downsizing by some of Wall Street's largest employers have elevated concerns that the tumult in the U.S. economy could lead to a 20 percent cut in the financial services labor pool. But since the financial impact is spread across investment banking, asset management and capital markets, each with its own competitive pressures, the long-term consequences of this market realignment are still unclear.
"Wall Street over hires and they over fire and the same thing will happen now," says Jay Sterling, senior consultant with Cromwell Partners/TRANSEARCH in New York City. He adds that while such layoffs raise significant issues about performance management and the process by which those companies will hire and fire in the near-term, financial services continues to attract talent in ways that no other market sector can.
"There's a huge amount of executive search interest in financial services, so there's neither a net influx nor an outflow of talent out of the United States," Sterling says. "People from engineering schools are coming into the financial community in droves and we're seeing some very technically skilled people move into these markets from places like Asia, India and Europe because of the increasingly quantitative nature of top financial services roles."
New talent is continually gravitating to financial services, he explains, not only because of the compelling monetary rewards, but also because of the new knowledge-based and technical requirements for ever-complicated financial deal making. "Take derivatives, for example," Sterling says, "where you have these heavily quantitative positions that require people who know how things fit together. It's almost all financial engineering. Most of the big engineering schools now have big financial engineering programs..."
Sterling says that more employers in the global financial services markets be they private equity firms, hedge funds or others - can find qualified specialist talent in their local market than ever before. "When I first got into this business 20 years ago, there was a tremendous movement of people from the United Kingdom to New York, but I don't see that anymore," Sterling says. "Back then, if you were a chartered accountant, that was equivalent to an MBA and you could get a job in banking in New York." Now, he adds, there are far more backgrounds that can apply to a far more complex financial services marketplace and ever increasing opportunity to be found much closer to home for people across Europe and Asia.
Because of the continuing transfer of wealth to emerging markets, Sterling adds, many global citizens with significant financial services experience can opt for rewarding careers in their home country. "There are so many people with Indian backgrounds living in the New York area, I'm sure many of them would find going back and working, at least temporarily, in India an attractive option," he says. And for younger generations in India and other emerging markets, it's clear that an assignment in New York or London isn't the only way to the top. "They don't need to go there anymore because the work is so good at home."
