2014 in Review; Our Findings From a Year in Recovery in Banking

​This past year proved drastically different than the preceding six years in nearly every way; mainly due to a switch in the balance of power between companies and candidates. Jobs were so scarce during the recession that getting an offer meant getting a placement, because no one turned down a fair offer. Hiring authorities were flooded with options at that time, and could get employees even with a decrease in pay.The NeedAt the beginning of 2014 we advised our clients to hire as soon as possible, rather than wait a quarter or two, because hiring was becoming a lot more competitive.  As the year went on, our predictions became reality.  Last year we repeatedly heard that banks were extending multiple offers before one of those candidates would accept a position.  Banks would extend an offer only to lose the candidate to a counter offer from the current employer. Candidates are receiving multiple offers, with each offering more than the next employer.  Not only have banks been getting more turndowns, but it has been taking weeks and months to even receive them.  This is because people stall when they can’t make up their minds.  When a bank has commercial lending vacancies are at risk for losing clients.  Clients are vulnerable when they have no lender.  If I was a lender, I would be calling on any company with a known lender who just switched jobs.  Having a vacancy for months is too big of a cost for banks.  Unfortunately, banks couldn’t assume they had landed a banker just because someone accepted the offer and started work either. In some cases, months after a candidate started with a new bank their last employer would persuade them to return for a better title and a bigger pay.Banks have money to lend, and when the market is strong everyone wants a salesperson.  Shareholders want to make money again. One client told me recently “This hire needs to happen this month, before year end.”  There is pressure to hire from above, and it is an easily tracked metric that higher ups can use in evaluating the effectiveness of their people in hiring positions.The ShortageI call 2008-2013 a cleansing of the market place. Many people left banking because it became tough industry, they were last hired and first fired, or because they weren’t all that great at banking in the first place. Many bankers are finally retiring as their retirement portfolios recover. There also seem to be fewer bankers on the junior end for two reasons: banks didn’t hire many junior people during the recession and new industries are competing for those junior people.Values have shifted. Boomers were attracted to the stability and slow growth banking could offer them, but banking has recently proven to not always be so steady.  There are also newer sectors like technology that offer non traditional perks like flexible schedules, campuses with food and entertainment, and much higher pay.  In fact, I tried recruiting a cohort of MBA graduates. The conversation went like this:Me: “Think about banking.  You can start as a credit analyst.”MBA: “What does the pay start at?”Me: “A new credit analyst needs training, so right around $50k, maybe $60k.”MBA: “I am interviewing for a job that pays $75k to start, and I don’t have to wear a suit.”With so few junior lenders, we’ve seen people get a $30k pay raise in their first banking move. All salaries have taken a jump, averaging about 10-30% across the board.  In short, there are more openings than lenders, and now lenders can take their pick of positions.New Positions Hired1.  We’ve seen a sharp increase in hiring for backroom positions again, which did not happen during the leanest years because those people brought no direct profit to the bank. Retirements seem to be the biggest driving factor of hiring back room positions.2.  We’ve also found clients who are dying to get back into commercial real estate, which previously felt like it might never happen again.SBA lending and reselling on the secondary market have been an increasingly popular trend.3.  The duo of hunter and farmer is back. Business development officers and portfolio managers must find a way to work in harmony again.  Sales people excel at what they do, and banks who want to book substantial dollars are finding ways keep them doing what makes them happy, along with getting portfolio managers to oversee the numbers and paperworkConclusionBanking is far more fun now than it has been in years.  We hope many companies and bankers find success in recovery.  As for our team, we are getting more job orders than we can keep up with.  We are turning down searches that aren’t full fee and companies that have to interview 50 people to find the right one person.  We have to make the best use of our time, and our time is best used in working with clients who like a mutually beneficial partnership.  Which shouldn’t be news… but in many ways, it really is.Happy 2015 to all of our friends in banking and beyond.