Large banks in the U.S. lost more corporate and commercial talent last year than at any time in at least a decade, according to new data on turnover from the consulting firm Sheffield Haworth.
Twenty-one big banks lost 111 high-level bankers from their corporate and commercial business units, Sheffield Haworth found in a report, with only 99 hired in their place. The report focused mainly on U.S. megabanks, big foreign banks that operate in the United States and large regional banks.
The losses came despite record increases in expenses last year, driven in large part by higher wages paid out in the so-called war for talent. Some bankers moved to smaller rivals within the industry, but more often they took jobs at smaller private equity firms and debt funds that can substitute scale for flexibility in the competitive credit market.
"There is an appeal to work in less regulated environments," and people are moving from "battlecruisers to more nimble frigates,” Sheffield Haworth Director Gene Swift said in a recent interview.
JPMorgan Chase executives said at the company’s May 23
“We are feeling more and more the wage inflation filtering into the franchise,” said Daniel Pinto, JPMorgan’s chief operating and chief executive of the firm’s corporate and investment bank.
Of the nearly two dozen banks studied, Wells Fargo had the highest turnover. The San Francisco bank lost 27 bankers from its corporate and commercial teams and only brought eight aboard, according to the report.
As regulators cracked down on Wells Fargo in recent years amid a string of scandals, Swift said there was “a level of demoralization” at the San Francisco-based bank.
But in April, Wells announced the hiring of
"That is a very important hire and in our opinion a very good one. That will help the corporate and investment bank to enhance its trajectory," said Julian Bell, managing director at Sheffield Haworth.
O’Hara is expected to attract fresh talent to Wells Fargo as the company tries to put its troubles behind it. Referring to the turnover that the $1.9 trillion-asset bank saw in 2021, Bell said: "I don’t think you’ll see that this year.”
But as the supply of experienced talent within the banking industry shrinks, it might be difficult for some banks to rely on outside hires to compensate for losses.
Some headhunters foresee that banks will turn to younger candidates within their own ranks to fill recently vacated positions.
“There are just simply not enough people of the typical age to fill senior management positions, you know, that's part of the gap as well,” said Carll Wilkinson, president and CEO of the executive search firm Smith & Wilkinson. “And that I do think creates opportunities for millennials to find themselves in leadership positions faster than prior generations might have.”
Citigroup ended the year down eight senior banking officers, and HSBC lost a net of five, according to the Sheffield Haworth report.
One major bank that showed progress last year in the “war for talent” was Bank of America. The Charlotte, North Carolina, company made 11 total hires on its corporate and commercial banking team, more than offsetting the 10 bankers it lost.
BofA is an example of how the aggressive talent acquisition investments by large banks could pay off, Bell said. "The larger-cap banks are now saying they have much more to do in this space.”
