What happens if U.S. investment banks disperse the operations they currently have in London across Europe after Brexit? It might not come to pass, but it's certainly a possibility. And it's one that could cause trauma to a generation of London-based bankers who want to work for U.S. investment banks more than anything else.
We asked 2,000 bankers in the U.K. which companies they'd ideally love to be employed by for the eFinancialCareers Ideal Employer survey. Their answers were: Goldman Sachs, followed by J.P. Morgan, followed by Morgan Stanley. London bankers are nothing if not predictable. They expressed exactly the same preferences in exactly the same order last time we posed the question in 2016.
In the event that U.S. investment banks do decide to shunt a significant proportion of their London jobs into Europe, the survey results suggests that City-based bankers might be left feeling bereft. Comparatively, British investment banks are a lot less alluring (although more alluring than the Swiss and the Europeans). With Google in fourth place, HSBC and Barclays rank fifth and sixth respectively.
Major U.S. investment banks have bolstered their presence in London over the past 20 years. The most popular, Goldman Sachs, doubled its London headcount between 1999 and 2016 and now employs around 2,870 front office bankers in London and around 2,755 support staff. Richard Gnodde, CEO of Goldman Sachs International, has said the firm will shift "hundreds" of jobs out of London during the first period of its contingency plan and there have been unconfirmed claims that the firm is contemplating halving its London headcount and moving trading jobs to Frankfurt and support roles to Warsaw.
Nor do things look especially promising for British bankers' second favourite employer - J.P. Morgan. The U.S. bank has already dedicated 125,000 man hours to analyzing the options for relocating part of its UK operations after Brexit and CEO Jamie Dimon has warned that up to 4,000 jobs could go. Meanwhile, James Gorman CEO of Morgan Stanley (UK bankers' third favourite option) feels so moved by the dangers of Brexit that he felt compelled to publicly draw Theresa May's attention to the allure of other European financial centres at an event the two both attended last week last week.
Of course, there's always Google, which ranked fourth as the most popular place to work in London among our respondents, and is creating 3,000 new jobs in London irrespective of access to the single market. There are also consultancy firms like PWC and McKinsey & Co, which should benefit from any Brexit-related turbulence. The big loser this year was German firm Deutsche Bank, which fell seven positions to 15th place after capping off a problematic 2016 with some non-existent performance bonuses.
What makes US banks so alluring to British bankers? In short, pay. 84% of the people who wanted to work for Goldman Sachs though it offers a competitive salary and 79% thought it offers a competitive bonus (down from last year 83% last year). By comparison, 78% and 72% respectively thought salaries and bonuses were competitive at J.P. Morgan. And 76% and 68% thought salaries and bonuses were competitive at Morgan Stanley.
When it comes to pay, survey respondents called it exactly right: publicly available figures suggest Goldman Sachs is indeed the best payer of the three, followed by J.P. and Morgan Stanley. By comparison, HSBC's reputation as a comparatively poor payer is borne out by the fact that just 56% of respondents think the bank's salaries are competitive and just 44% rate its bonuses similarly.
There's more to an ideal employer than pay alone though. As the charts below show, the popular U.S. banks score less well when it comes to expectations of working hours. And they're beaten by PWC when it comes to expectations of promotional opportunities and Google when it comes to expectations of working hours.
If the worst comes to the worst and jobs at U.S. investment banks in London are greatly diminished, London bankers could therefore have what they expect will be an easier life at Barclays, or a slightly easier life at HSBC. They might find themselves disappointed on both counts: HSBC's investment bank is now run by an ex-Goldman Sachs banker and J.P. Morgan's CEO comes from J.P. Morgan. The U.S. banking culture is here to stay.
View the complete 2017 Ideal Employer Rankings