The Australian Government has injected AU$2.8bn into the banking system and guaranteed bank deposits. But will these initiatives have any effect on recruitment?
Simon Tobin, national manager, financial services at recruiter Michael Page, comments: “There’s still a lot of caution out there. People are wondering what it will mean: they’re waiting to see what new regulations and government involvement will mean.”
Toby Aikins, at search firm Jon Michel, says the injection is not enough to boost confidence or make employees feel more secure in their jobs. “The banks, especially the big ones, are basically in a hiring freeze, and although it will probably have a stimulatory effect down the track, there’s no change yet. It’s not seen as big enough to stop any slide, though, but it will help control it.”
One banker at a European bank, who wished to remain anonymous, says sentiment in the financial sector has been low not because of the financial crisis itself, but because no one knew its dimension and character. But now “it is clear we are entering a global recession and so we now have a distinct, quantifiable, identifiable problem to solve.”
Tobin agrees: “Banking attracts intelligent, entrepreneurial people, and whatever happens in the sector, those bright brains will be working on it and probably coming up with solutions and practices that are entirely new and innovative.”
The Government’s intervention is not thought relevant to taming the “bonus culture” because it concerns local retail banks, rather than big-bonus-paying international investment banks.
If bonuses at the globals do fall, says Oliver Darkes, principal consultant at recruiter Carmichael Fisher, it will be because their bankers are part of a worldwide bonus pool which will undoubtedly be constrained by the global credit crisis.