High-Tech Finance Jocks Thrive Amid the Downsizing

While the banking industry was slashing mid-level and back-office jobs last year, it was in hot pursuit of highly skilled financial technicians, investment bankers, marketers, and risk managers.

Commanding six-figure salaries and perks that ranged from cars to club memberships and hefty stock option packages, these specialities were among the only areas of job growth in an industry rocked by consolidation and restructuring.

According to the Federal Deposit Insurance Corp., banking industry employment dropped to 1,484,388 as of Sept. 30, from 1,493,348 at yearend 1993.

While the aggregate job losses were less severe than in past years, more were in the works. News reports showed work force reductions of more than 20,000 were announced at major banks during the last year.

"There's a wholesale mind-set to make staffing and cost adjustments to produce more efficiency," said Emanuel Monogenis, who heads the banking practice at the New York recruiting firm Heidrick & Struggles. "All the managements are doing market-driven adjustments of staffs."

Because commercial banks were flush with profits in 1994 from the wide spreads in interest rates, they could afford to compete with Wall Street for foreign exchange specialists, exotic instrument designers, and corporate finance engineers.

On the consumer side, banks paid big bucks to lure product managers away from packaged goods manufacturers, returning to a trend that first appeared in the 1970s when traditional relationship banking began to give way to product design and market segmentation.

Now that interest rates are rising and margins more pressured, bank human resources directors and headhunters expect the surge in high-level hirings to taper off.

Demand for new people at money-center banks will also slow because of trading losses, these experts predict. As the swell of management-level hires made in 1994 subsides, 1995 should also see a slowdown in job losses among administrative and clerical staffs.

"Our banking practice was up 42% in 1994 over 1993," said Windle Priem of the New York-based recruiter Korn/Ferry International. "Half of the activity has been in the capital markets and corporate finance arena of these banks. The other part of the commercial banking practice that's booming is investment products and mutual funds. That's been very, very strong.

"Most of those people have been hired from other investment firms, other mutual fund companies. The traditional corporate lending people continue to be downsized and terminated," he added.

Those that do find new jobs in the banking industry in 1995 are likely to wind up in the same areas and have the same characteristics as people hired in 1994. Chief financial officers, for example, will continue to be in demand, at higher pay and perks and with greater responsibility than ever before.

"CFOs are now strategic members of management teams, particularly because financial institutions have to have the right controls in place as banks get into more exotic products," said Thomas Neff, president of Spencer Stuart & Associates, a New York headhunting firm. "CFOs have generally become more important with the growth of acquisitions and the increased amount of downsizing," he added.

Mr. Neff said chief financial officers at banks with more than $5 billion of assets can command $300,000 to $500,000 in base salary, with bonuses of 40% to 60%.

Chief information officers and lower-ranked technology experts are also in demand, primarily because computers have become so crucial to banks' cost-cutting efforts.

"Technology has become a competitive weapon," Mr. Neff pointed out.

Chief information officers at large banks make salaries in the $200,000 to $400,000 range, with bonuses similar to those of chief financial officers, Mr. Neff says.

Banks also have been on the lookout for investment managers, especially those with "portable skills." These portfolio managers win salary packages well in excess of $500,000, according to John Platte, managing director of the regional banking practice at Russell Reynolds Associates.

"That was unheard of three or four years ago," Mr. Platte said. "At the money-center banks, the pay scales for such jobs is even higher."

International hiring, which underwent a huge decline after the debt crisis of the 1970s and '80s, was back in vogue in 1994. Those with languages useful in Latin America or Asia could find work at Citicorp and Chase Manhattan Corp., although Citi much prefers to groom its own talent rather than hire professionals.

With earnings projected at a record $3 billion for 1994, Citicorp is "aggressively in the hiring market," said its head of recruitment, Hoyle Jones. "We're looking for U.S.-educated Asians and Latin Americans to go back home and grow businesses."

At Chase, the emphasis is on worldwide investment banking, global markets, and trading activities. Reflecting the trend across the industry, Chase executive vice president for human resources John Farrell said the bank expects to "go toe-to-toe" with Wall Street firms, which means paying investment bankers and traders more than traditional bankers.

"If you're going to play the game you've got to be competitive," he said.

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