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Why Wall Street is losing the talent war – and how to turn It around

business competition two vs two

Amongst the number of hurdles facing Wall Street – from capital requirements, to new trading rules, to its still-sullied global reputation – the most influential, at least over the long-term, may be its newfound inability to consistently attract top talent.

Each year, management consulting firm Oliver Wyman puts together a comprehensive report identifying the major “blind spots” that may impede growth in the banking sector. “Talent management” was right there in bold.

The case for why top-tier graduates are more interested in careers in technology and consulting is rather obvious. Compensation is down, political and media scrutiny has intensified, and compliance and risk management has become a bear. But the firm offers some real-world suggestions on how to make Wall Street a sunnier place to work, courtesy of the Wall Street Journal.

First proposal: take some talent management responsibilities away from human resources and hand them to senior leadership, making them more responsible for “talent outcomes” – i.e. turnover etc. Judging by our comment section, this would make aspiring bankers very happy.

One of the biggest problems on Wall Street is that the person on the bottom rung is, in essence, a tool for the people one or two rungs above. What do they care if you burn out? Putting leaders on the “first line” of talent management – and making them personally responsible for the metrics that go along with that – could be a significant help. Right now “nurturing talent” isn’t on many to-do lists. It’s toward the top in other sectors.

Other ideas include providing a greater variety of work experiences – something banks don’t often – and subjugating Wall Streets’ ego-driven culture (good luck).

The list is a good start, and one that’s certainly needed. Three top U.S. graduate schools – Harvard, Yale and Cornell – are seeing larger groups of graduates head to Silicon Valley over Wall Street. Just more than one-quarter of Harvard Business School grads took jobs in finance last year, down from 35% in 2012. Roughly 18% went into the tech field, up from 12% a year earlier. On the undergraduate level, consulting has overtaken finance as the top destination.

Sales & Trading Questions (eFinancialCareers)

We’ve collected a list of questions recently asked of business school students who have interviewed for sales and trading positions at large banks. Some are behavioral, but most are aimed to test your market knowledge. How would you do?

Flat Pay at JPM (Reuters)

Due to its lengthy legal bills, bonuses at J.P. Morgan are expected to remain relatively flat this year. Compensation expenses within investment and commercial banking will be down roughly 4%.

Bageled (Dealbreaker)

Analysts and associates at Credit Suisse reportedly received little more than a lump of coal in their bonus stocking. Meanwhile, bonus announcements in London have been delayed.

Double-Edged Sword (eFinancialCareers)

If you thought making it to managing director was the Promised Land, forget about it. “It doesn’t ease off, it goes the other way. Managing directors in investment banking last around 18 months.”

Banned (Reuters)

A judge has ruled that the Chinese affiliates of the Big Four accounting firms be barred from auditing U.S.-listed companies for six months for failing to hand over audit papers of Chinese companies . The firms plan to appeal and fill continue to practice.

Sentenced (Bloomberg)

A former Morgan Stanley employee in the bank’s finance department was sentenced to life in prison after being convicted of strangling his wife. Manas Kapoor was due to attend a disciplinary meeting at the bank the day the murder occurred.

PIMCO Set to Hire? (WSJ)

With former Chief Executive Mohamed El-Erian now retired, PIMCO founder Bill Gross is, yet again, eyeing a bigger push into equities. It sounds like the asset manager may be in need of additional staff.

Buzz Around the Office

Getting the Cold Shoulder (HuffPo)

Here’s video evidence why, as a national news reporter, choosing a snowball fight as a venue to talk weather patterns is a poor idea. At least Anderson Cooper enjoyed himself.

Quote of the Day: “People shouldn’t want us to be everything to everyone,” Chief Executive Officer Michael Corbat on his restructuring strategy.

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