How Top Talent Is Dealing with Tough Times on Wall Street
Posted on Winning the Talent War: September 18, 2008 11:01 AM
Viewed from Wall Street, the current credit crunch and market turndown is exceptionally difficult to deal with. Imploding firms, cascading losses, huge layoffs (100,000 and counting), and the fear that rich returns are a thing of the past—that new restrictions on leverage and risk will limit profitability going forward—make this the toughest down cycle in a generation.
So how is top talent dealing with this onslaught? In a word—badly. A new study published this week by the Center for Work Life Policy details a sobering picture.
Loyalty and trust are at an all-time low: the number of employees who feel loyal to their company has fallen 42% over the last year, while the number who trust their company is down 41%. And flight risk is off the charts. In the wake of mass layoffs troubled firms are finding that many "survivors" look elsewhere. This study shows that fully 64% are considering leaving and 24% are actively looking for a job. From the vantage point of the firm, precisely the wrong people (top performers with other job options) are heading for the door.
Top female talent is particularly skittish. Eighty-four percent of women in this study are considering leaving—compared to 40% of men. In focus groups women talked about "recalibrating at the margin." One star performer described her reasoning: "The cost benefit equation just tipped. Stress is up, comp is down and I sure could use time with my kids. This is a year to sit out."
The voices in this study are powerful. A male investment banker (who has lost 80% of his net worth in the last year) tells of bad dreams and grinding his teeth so badly he recently cracked two molars. A woman trader talks about being "almost glad" of a recent diagnosis of breast cancer. In her words "it's only stage one and it sure puts the crazy stress around losing my job into perspective."
Huge kudos go to the companies that spearheaded this research. Downcycles are usually studied in retrospect—few firms have the stomach to explore the "point of pain" when it's actually happening. This study is therefore exceptional. In March 2008, a group of six financial companies (Citi, Credit Suisse, Goldman Sachs, Lehman Brothers, Merrill Lynch and Moody's), working with a research team from the Center for Work Life Policy, plunged into these issues in an effort to support and nurture key talent. It took a lot of guts. Particular credit goes to Subha Barry of Merrill Lynch and Anne Erni of Lehman Brothers who led the effort. The events of this week underscore their courage.
Have you been hit by this downturn? Has your employer reached out with support and understanding? Please share any helpful interventions you have heard about.