August 10, 2021

Why Is the Financial Industry Opposed to Remote Work

Hosts:

Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.

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Today James and Jin discuss the latest developments on the adoption or lack there of WFH in the financial services industry. They talk about the latest trends and incentives from banking to fintech and most importantly views from the employers and employees. Things have changed a lot over the years regarding WFH, but the financial services industry is not so quick to adjust and adopt.

Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.

Episode Transcript

In your view, what’s happening in financial services from remote and everything else? Yeah. So, it’s a really interesting time  within a lot of different dynamics are coming into play. We obviously have people that are being asked to come back and then we’ve got the main banks, the big banks. Your Citibanks, your JP Morgan or Goldman Sachs, Morgan Stanley and then all the way down to the even more boutique investment banking shops are really fighting for their survival when it comes to their junior analysts. $25,000 one time sign-ons, they’re raising first-year analyst pay up to a hundred thousand in base.

 

 And I think that’s because they’re hearing from their workforce at that staff level, we want better work life balance. Typically an analyst coming into a role like that it wouldn’t be uncommon for them to be sleeping at the office. No one’s going to leave the office before their director deems that okay.

 

The day is actually done. So, the whole crux of the argument is there’s a lot of really brilliant people across all types of industries, especially financial services, and they have options now from other industries. They don’t have to do the same line of work because I think the value proposition, is changing as far as what the candidates want, what the workforce wants.

 

Yeah. So there’s a lot to unpack here. They want more work-life balance and their solution that these, it just sounds like it’s more financial incentives. Is that right? That’s how it’s traditionally done.  I’m also curious.

 

So I mean, the articles I’ve read and you meant there’s probably a lot we can kind of talk about, but there’s a lot that’s been out about Morgan Stanley and lots been about Chase. I think Goldman’s another one I saw, but a lot of like large financial orgs are forcing people back. Is it trickling or like mid-size organizations, smaller startups-

 

is it pretty uniform or do you think, are there other cracks in it where there’s other organizations that are going the other way? Well, so we’ve already seen a capitulation between like a city bank, a UBS, where they’re saying, “We’re gonna migrate to a hybrid of some sort.”  In hearing and having conversations with people in the industry that do back office, front office, middle office, what they’re hearing is kind of the same, motto or same type of scenario where if you’re comfortable in your little space of doing what you do and you lack the ambition or the drive to further climb the corporate ladder, then maybe working remotely is something that could be all right for that person.

 

And then you also have the other age old jargon that says financial services is a relationship business and we need to be able to meet with our clients. Now we all know because we just came from COVID a year of working at home that businesses do operate while everyone’s working remotely, profits are at all time highs

 

for a lot of these organizations. This IPO market is exploding again, as far as more companies. So the employees are saying,

 

is that really true?  It kills me from the second part of that like, we’re a relationship business, we meet with people in person- you’re assuming that your clients actually want to meet with you in person.  The reason why, I guess I want to pick on the financial industry is because this seems to be what’s like driving it- they’re like the biggest holdout.

 

Because a lot of the more tech progressive firms, we’ve seen a lot of places in those areas. Look, industries are different. There’s a lot of industries where manufacturing, you have to be there to make stuff.  There’s a lot of places where there there’s no option. Obviously hospitality, like have to be there at the hotel would have to be there to work the restaurants, that type of thing. But financial services is one of those where like I affectionately call the circles that you and I work in, like we’re office dorks. Although that doesn’t really make any sense anymore since we’re not really in the office.

 

 Most of the companies that we work with and most of the circles we kind of run in are people who fall in the core areas of like technology, digital marketing, operations, finance, like all these things are office-based work, which don’t actually need to be in offices anymore.

 

But financial is that one area where- I don’t know of any other industries that maybe I’m missing or any that are as blatant or as vocal about their wanting to go against the trend of remote work for no really discernible reason. Yeah. I would agree with you as far as being the most prominent, the most ambitious, as far as having news coverage about it and sending out corporate information to be public information out there. I agree with you. They don’t make anything. The only thing they make is and making money can be done anywhere.  And also I think too,  it used to be that financial services companies were thought to be, and I don’t know how much facts are actually out there about it, that they compensated at the upper echelon of most other industries out there.

 

And so the de facto benefit of that is that they could tell you what working environment you have must adhere to,  to get compensated this way. Well as I said, there’s a lot of other industries that are really hiring for intellectual talent and they’re open to industries and there are a lot of folks within the financial services industries that maybe aren’t- I don’t want to say maybe aren’t as infatuated with the industry as we’ve gotten more and more coverage on maybe not the great things that- and I know lumping every company in financial services in one thing, but it used to be when I was growing up that my mom wanted me to be a lawyer, a doctor, or a banker.

 

I could say that my mom honestly, probably thought that the first two lines of professions were virtuous.

 

I will say this because you made me think of something here- like this is kind of anecdotally.  I did tech recruiting strictly for 10 years before I kind of moved in and started a marketing area. But even still, a lot of the big banks for a long time were hard to pull people from in technology just because of kind of what you said, they paid well, their benefits were always great. Chase, Bank of America always had just like- they had better benefits than most at that point in time at least, than a lot of other organizations you work with.  So they weren’t really places where, as a recruiter you would target people for -you know as was a recruiter you’re targeting

 

companies that are struggling or targeting companies where we know people are unhappy. The financial service industry for a long time treated people well. I almost wonder if that’s, if it load them into a false sense of security on this, because there’s the financial people who are specific that to industry

 

but then there’s everything else. Like all these organizations; Morgan Stanley and Chase and Goldman, like they have digital marketers, they have HR people and operations people. They have technology people, and those people don’t need to stay in that industry at all. They can go anywhere else they want to.

 

And if you’re forcing them to go back,  you can keep comping them more, you can keep increasing their bonuses but at some point once people have gotten a taste of what it’s like to have three-day weekend on a more regular basis, you know what I mean? Or be able to just take care of certain life things.

 

I’m curious as these policies go into place because a lot of these places haven’t started fully getting people back, like what we’re going to see in two or three months and how that’s going to change kind of they’re old and are they not expecting a big Exodus in a lot of these areas because they’ve been lulled to sleep because their trick of just paying a little more has always worked

 

and will that continue? It becomes a lot of a push and pull type of thing.

 

And I think that the organizations themselves, by and large part are hoping that this is a transitory type of topic and that things will return back to “normal” which I think that they’re a little, maybe looking at it with rose colored glasses on that. And here’s to that point, here’s what a lot of places don’t quite grasp.

 

I think they have a perception that it’s going to go back to normal because most places are going to go back to normal and that’ll be fine. They don’t realize when it comes to something like remote work,  you don’t need everybody to stay remote. You don’t even need half a company to stay remote.

 

you need 20% of companies to stay because that’s all job seeker needs is one or two options here or there and they can chase it down. They don’t- it doesn’t matter if it’s the minority of companies that kind of keep that hybrid model because if you look at it from like a location perspective, it’s completely changed.

 

If you’re any skillset, you know, if you’re a developer, if you’re a digital marketer and you live in a smaller market, you live in Des Moines, Iowa, or someplace like that. Before the pandemic, you were kind of bound by, okay what companies need tech or digital, whatever in Des Moines, right? Now, it doesn’t matter.

 

Now the world’s your oyster. Now you can work for a company anywhere as long as they’re remote. And there’s a lot of companies that are open to it and way more now than before that aren’t going to change.  If you’re in the financial industry and those non-financial positions, like those people now have tons of options and they’re not going away.

 

And you know what I mean? But even if they are those financial specific positions, it only takes- if 20% of the financial industry stays remote, that’s going to completely change the complexion of how people with those skill sets are going to kind of look at jobs because they can. Right.  The other thing too is as we start thinking about like financial services specific positions, I catch myself challenging, name a position where someone that is extremely successful, who has the ability, whether you’re back office, corporate finance and accounting or you’re middle office operations or you’re client facing, we have a lot of clients across many different industries that want proficient professionals.

 

Yeah. And there’s a lot of crossover skillsets because it is a professional service. The financial services companies are primarily delivering on.  I think the candidates, the workforce themselves, they are now opening their eyes where they’re no longer boxing themselves in to the point where you were saying before about recruiting tech folks out of banks,

 

because they normally- well maybe that was more of a self-imposed type of box that they put themselves in. And now they’re getting recruiting calls from someone in California that allowed them to work a hundred percent remote. I know that because I’m the one making those calls, you know, in the reverse op direction.

 

Well, it’s interesting too because if you just look at what’s happening in the financial services space, you’ve got all these, there’s so much more innovation. There’s so many software focused firms. There’s so much more crypto based decentralized finance firms. There’s all kinds of, I mean Robin hood, just blew up and then they’re not going to be the last. There’s other places coming out that are more tech focused, more forward thinking that can hire all these people with these traditional finance skillsets that, that’s the direction where I think finance in general is moving forward. And the more of these kind of companies that exist, more innovation, it just gives people more options. And it’ll be interesting to see. I’ll be very interested to see if there’s a mass Exodus this fall, because I think there will be at least this summer.

 

I think you’re probably right. But kind of in that vein of like what happens next? I work with a good number of startup companies. They like to call themselves FinTech.  I always wondered why they were so adamant about delineating themselves outside of the financial services umbrella.

 

But what I’ve noticed, the common thread is that these FinTech companies, these newer companies they’re embracing work from home, they’re embracing flexibility, and open dialogue with their employees about it. And who are they trying to attract talent from? The more established, traditional financial services companies, and they’re offering a value proposition that these employees are seeking and desiring. Yeah, no, that’s interesting. That’s almost like it’s an employer brand code terminology for people. And that’s the thing is if you’re working at Chase or Morgan Stanley, you can always go back in the future if you want to.

 

Why not take a shot and then try someplace it’s more of in the FinTech space and see if you enjoy it and see if like the culture better. I don’t know. Yeah. I think traditional business is run on from an employee’s perspective.

 

I definitely think this is what we call it in our industry at candidate driven market, that candidates are the ones that are in the driver’s seat. They’re the ones that decide.  So, I think when it comes to the financial services,  they definitely are the ones that are holding out the most vocally. Yeah. I do have a lot of clients that are also in other industries that are hoping that people will come back into the office.

 

There’s a tremendous opportunity. If someone can kind of get their arms around how to make people feel comfortable about starting a new career, offer the training remotely and also just making sure and following up with them, without the advent of being in the office together.

 

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