If you still have a job in the City then you have something in common with the great novelist, Fyodor Dostoyevsky. In 1849, the writer was about to be shot by a firing squad for dissent when, at the last moment, he was pardoned by the Czar.
Living with the threat of layoffs is like the mental torture of a mock execution. It has traumatised the average city worker. You would think people might have had enough and looked for greener pastures elsewhere.
To paraphrase Mark Twain though, reports of the City’s demise are greatly exaggerated. I don’t think people will run away from their jobs. If they have kept them so far, they are likely to be feeling lucky. They also have the fear.
Most of my friends work in the City. Most of my friends would like to do something else, but they’re unable to for financial reasons. Many of them would sympathise with the author of this Bloomberg article who claimed that he was finding it hard to get by on $350k a year.
The problem is that the longer you delay leaving the City, the higher your liabilities. The longer you work the more you want your own flat or house – renting isn’t fun after the first few years. And mortgages are dirt cheap, as long as you have saved enough for a big deposit. And then you have children.
Hence, I know:
#1) Steven, a Principal in a mid-market buyout firm, locked in to a long-term carry agreement vesting over at least eight years. He’s smart and personable and could do almost anything, but unusually for current private equity funds his firm has invested well and he stands to make a lot of money when their portfolio is eventually sold. Of course, eight years is a long time and a lot could happen to change that, but he’s risk averse and I don’t see him leaving.
#2) Claire, internal corporate strategy at a bank. A workaholic with huge MBA debts. Every time I chat to her she tells me how her heart is in the non-profit space but she knows she’ll never repay her student fees if she resigns.
#3) Johan, a banker at European bulge bracket. Hates M&A and is stuck in a sector team he has no interest in with colleagues he dislikes intensely. A born travel journalist, would love to backpack around the world for eighteen months, and he could probably afford to, but he’s afraid there won’t be a job to come back to in 2014.
#4) Deepak heads a derivatives trading desk at a large bank. He’s just got engaged and he doesn’t get on with his fiancée’s family. The fact that he has a high profile job at one of the biggest banks in the world is just about the only thing he has going for himself which means he won’t be able to leave for at least another two years.
It will take a lot to encourage any of these people to move out of banking. They may have less to gain from staying in the industry than they used to, but they have far more to lose by leaving intemperately. Because of this, they’ll stay – unless the decision is made for them.
The author works in investment banking and often dreams of taking a gap year, or five.