AGEISM IN GLOBAL BANKING

“Can you be ‘too experienced’ for a role if you are willing to apply yourself in a dedicated manner to the opportunity?”

AGEISM IN GLOBAL BANKING

Too experienced or too old?

Below the corporate face of banking rests a growing pool of highly experienced but unemployed bankers. They are the casualties of the turmoil in the Financial Services sector over the last seven years. Their unemployment is the by-product of the much advertised effort of the banking sector to drive down costs, with redundancy programmes removing excess managerial headcount and distributing this floating resource to the open market.

Coupled with this (for those still in employment) are sustained pressures, falling reward, public animosity towards the sector and the sense that the high days of banking have been and gone. Not surprisingly, an increasing number of the experienced managers of the sector are taking stock of their career. Upon this reflection some are now seeking alternative options, outside banking. As one previous global CAO markets, with 30 years’ experience although still only in his early fifties, states:

“I see a lot of experienced individuals taking the opportunity to pursue alternative careers and make lifestyle choices. They have become disillusioned with the financial sector, so are using their experience (and redundancy money) to do other things. This in my opinion is creating a brain drain from the sector. Whilst those seeking re-employment into banking may well be considered casualties, the banks have also given many an unforeseen opportunity and choice, and many of them are turning their backs on the City. Many think good, experienced individuals will become scarcer. I have seen many friends struggle with re-entering the market, being told they are ‘too experienced’ with this or that role, whereas others have found interim employment within a contract role, invariably engaged to undertake tasks aligned to regulatory change.”

This shift must be put in context. While the overall population in the banking sector has shrunk, many of the more junior staff post-redundancy have managed to be absorbed back into it. It is mainly those at a more senior level, with more than 25 years’ experience in banking and previously holding appointments at director to managing director level, who are finding re-entry into the permanent employment market challenging. It is widely acknowledged that the banking sector was overpopulated at the executive level and in need of pruning, so this cannot be a surprise for many.

Such cost-cutting programmes successfully met the expectations of shareholders demanding action by the banks to drive down cost and reward. However, unforeseen at this time was the mid- to long-term impact of regulatory change and additional demands from shareholders that banks establish a stronger risk and control framework to avoid the calamities of the recent past. The challenge for all banks is to meet the demands of this ever changing environment with a reduced headcount, a significant loss of intellectual capital and a lack of seasoned leadership.

Traditionally the banking sector had filled such transformation and project demands for intermediate help with additional internal resources and floating headcount or by engaging management consultancies. Now banking has few internal resources to draw upon to manage change programmes, and the cost of engaging consultancies on a long-term basis works counter to the objective of effectively managing the bottom line.

However, we need to be aware of the view of those who have been let go and have found themselves in the unenviable position of being unemployed at a comparatively late point in their career. Some argue that these seasoned individuals have been paid handsomely for many years and their present hardship should thus be weighed in comparison to those perceived less fortunate outside banking. But the majority of these individuals were not leaders; they were senior employees who had been servants to the business, dedicating themselves to careers in non-direct revenue generating roles such as COO, business management, risk, finance, technology and operations. They are part of the sector that has suffered a dramatic decline in fortunes, but certainly they were not culpable. Many high-profile bankers who led respectable businesses have become casualties of market change, but they are often in a position to retire without having to seek further employment. The middle to senior management of the non-direct revenue-generating world, on the other hand, may have been paid comparatively well, but they find themselves in middle age with family and personal commitments based on consistency of income. They are not able to take early retirement.

A high percentage of this talent pool recognises that the banking sector is now in a different phase of reward and opportunity. Most would happily take secure employment at a significantly reduced financial reward and accept that this compensation profile is unlikely to return to what it was pre-credit crunch. Surprisingly, many have found this willingness – combined with their experience – to be a detrimental factor. This is often an uncomfortable experience: this talent pool was often previously the hiring manager – the client of recruitment and search agencies. Now they find themselves the candidates, seeking guidance and help. They find their hopes of prospective employment dashed by questionable feedback such as being considered ‘too senior for the role’, ‘too experienced’, ‘possibly institutionalised’. In some cases their common sense with regards to compensation is met with cynicism that their own pricing is short-term pragmatism, which will unfold as unrealistic mid- to long-term expectations.

Can you be ‘too experienced’ for a role if you are willing to apply yourself in a dedicated manner to the opportunity? Is hiring someone at a lower financial reward than that person previously received beneficial to the individual in securing gainful employment and to the employer in securing talent cost effectively? Many of these arguments lack substance and could be defined as weak excuses. It is at the very least debatable that the banking sector is suffering from discrimination and ageism in relation to this seasoned group of professionals.

Unlike the 2005 legislation that sought to reduce and mitigate ageism for those in their early to mid years of employment, it appears we also need protection for those at the mid to latter period of their careers. Many would consider the banking sector, as it navigates troubled times, to be in great need of the experience of those who have battle scars from many years in the industry. Surely transformation and change agendas can be more ably handled by such experience, and regulators, the public and politicians would feel more comfortable in dealing with ‘silver-haired’ executives.

The challenge for those out of work is that there will not be any overnight change in market sentiment or perception. Indeed, it may not even happen in the next few years. Unlike in Asia, where age and gravitas are perceived as primary attributes for senior executive roles, western capitalist culture has a career orientation that suggests banking is a young man’s game, especially within financial markets.

Need this be the case? Is this the case?

As we ran towards the end of the last century, there was a sea change in banking that demanded a new breed of professionally qualified people. This was aligned to extraordinary growth in the sector. Many were fast-tracked to directorship at a young age. This built an expectation of such advancement in those further down the corporate ladder. As a consequence, there now exists an ageing directorate and a talent block below them – and both are positioned in a shrinking sector for opportunities. In addition, people are living longer, working longer and able to add value longer. Despite this, only a very small percentage of those now employed in the banking sector are over 50 years old.

It is the alignment of these factors that the industry needs to address in dealing with this growing problem. It needs to work out how it can retain, use and reuse this ageing population, while maintaining opportunity based on merit for the rising talent and the leaders of tomorrow. Career fast-tracking and/or the migration and variety within jobs, slowing down advancement, may serve this purpose as long as expectations are carefully managed. However, while this will in part solve the problem, it may give rise to other issues within a sector where diversity and opportunity are key to attracting upper-quartile talent. This could also be aligned to changing working practises – it is not a lack of opportunity for gainful employment that is causing experienced people to be out of work, but the nature of that employment. Change management is needed to bridge the gap between the requirement to reduce cost and to meet the obligations of the regulators and control. It is into this gap that the resting pool of talent could be appropriately and ably employed.

For many, this will be an emotional challenge and will require a mindset shift from the former security of permanent employment, rank and title and the structure of the corporate ladder. This is because banks may hire individuals on a contract or interim basis to deliver against defined tasks and objectives. In doing so, they keep these people off the permanent headcount while securing relevant and proven experience to manage a programme of work, in many cases at a margin of the cost of engaging a traditional management consultancy. To do this, these individuals will have to repackage themselves, commoditise their experience and keep themselves up to date with the moving parts in a dynamic market place. Being enthusiastic, energised but still humble at interview will be key to securing such opportunities.

Some, like Rob Cook (46), who runs the Interim division of Armstrong Wolfe, recently made this career shift, resigning as EMEA COO for Emerging Markets at JPMorgan to become a professional interim. He is now working within Armstrong Wolfe Interim as a consultant on various assignments in London:

“I reviewed my career and realised my strengths, and where I enjoyed myself had always been working within transformation. Additionally, dedicating my life and career to climbing the corporate ladder simply did not excite me. I wanted to create a lifestyle which had balance and reward and met my desires for working within a change management capacity. With Financial Services companies being more open to and in need of flexible resources, stepping out of permanent employment was not so much a risk as a calculated decision to make myself available for employment opportunities that would meet my needs and match my skills.”

Rob saw the possibility of mobilising this dormant, underused senior management and executive talent:

“By harvesting this talent that has found itself out of work not by choice, repackaging them and offering new employment options, whilst at the same time offering flexibility for them to work on assignments for stated periods in the year, as they sought. Conversely, it is a cost-effective solution to meet many banks’ needs to engage experienced, subject-matter experts, whilst not adding to permanent headcount or engaging expensive consultancies – the latter more likely than not possessing less direct, in-business experience.”

Discrimination may exist, but opportunities are available for both the client and candidate to realise mutual benefit for those with many years in banking and finding themselves out of work. How both parties might position themselves to realise this benefit within an evolving and changing market and a growing and ageing population is unfolding. Marrying the two – client demand and subject-matter supply – is precisely where an opportunity exists. Through seeking to match experience with business need, an employer may be accused of positive discrimination in favour of those senior bankers actively seeking work. Conversely, they may simply be recognised for providing a much-needed service that releases the dormant experience and provides it to the banks on merit alone, not age or other factor.

Within this talent pool, there are a growing number of former COOs and business managers. Much of the work is related to the direct impact on the business. It demands someone with experience working within that business, alongside sales and trading, as well as someone who truly understands the journey from pre-trade, through trade to settlement. In these circumstances, the skills and experience of a COO or business manager are well suited. It may not be a career option, but it does offer a route back into employment for those carrying years of valued experience. Despite this, it does not address the creeping phenomena that age is a disadvantage to career advancement, especially for those whose determination to keep working is being thwarted by perception rather than reality. The silver-haired COO may not be extinct, but it is a rare beast indeed!

 

 

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