Carrer Track: Recruiter: Good Older Execs Glut Market

Traditional commercial bankers are "becoming an endangered species" as banks clamor for top executives with technological know-how, marketing savvy, and even asset-management skills.

That's the word from Windle B. Priem, one of the nation's leading executive recruiters.

Mr. Priem, president of North American operations for Korn/Ferry International, said he has "never seen such a surplus of highly qualified executives ages 50 and up looking for things to do."

Mr. Priem, 58, started his career in the 1960s as a corporate lender for Marine Midland Bank, and he has watched many of his former colleagues who have stayed in banking become surplus goods.

Some of these unwanted bankers are finding success in other careers, including the insurance industry, he said.

Mr. Priem recently met in his Park Avenue office with two American Banker editors to discuss the current hiring climate at banks and other financial institutions.

What is the hot job in banking right now?

PRIEM: Chief information officer. The supply is very limited, and the demand is very high. The salaries here have tremendously escalated. For large institutions, you will pay anywhere from $500,000 to $1 million. That's as hot as a pistol. I have 20 executive searches out right now.

What is the ideal background for these positions.

PRIEM: You have to have general management skills along with technical skills. If you are a chief information officer at a large institution, you might have 1,000 or more people reporting to you.

Where is most of the hiring in commercial banking today that you are seeing?

PRIEM: Most of the jobs fall into what I call transaction-type jobs, in contrast to general management positions. If we are working in a commercial bank, they want someone to come in and do equity work, or they are interested in someone coming in to do mergers and acquisitions. The day of our recruiting presidents, chief executives, and chairmen ended for us in 1992.

Why is that?

PRIEM: Well, there aren't any of these positions available. The banks became healthy, there has been very little CEO turnover, or turnover where they have gone to the outside for help. The drop-off in hiring for top- level management positions is a function of CEOs' staying where they are along with the consolidation that is reducing the number of banks.

What does the future hold for the traditional commercial banker, the guy who spent his entire career on the lending side?

PRIEM: I think we can recognize that the traditional banker isn't necessarily prepared for today's banking environment. He is an endangered species.

What can you do for a 50-year-old unemployed banker whose entire career was on the commercial lending side with little to no retail, marketing, or technical experience?

PRIEM: In the last 12 months in the larger commercial banks, there has been a greater awareness for risk management. If this executive has strong credit or risk management experience, there is demand out there.

So this banker can be refashioned into a risk manager?

PRIEM: Yes, but not in all cases. He could be, depending on the background; some of these people can move into that area.

The interesting phenomenon here is that we are looking for the type of executive who can evaluate three different risks in a commercial bank: credit, market, and operating risks.

We need a person who can blend and deal with all three risks. At institutions today - the larger ones - this has been evolving in the last few years. The chief risk officer will have reporting to him the chief credit officer, the chief market risk officer, and the chief operating risk officer.

But you can't place all of these folks?

PRIEM: The demands for these people are dropping. In the 32 years that I have been in banking, I have never seen such a surplus of highly qualified executives, age 50 and up, looking for things to do. It is at an all-time high. They often come from Bank A merging with Bank B, and they cannot find opportunities in the industry.

What do you tell them?

PRIEM: The industry does not need them. The demand isn't there. So most of the counseling that we are doing is taking them outside the industry. You will see a higher number of bank executives in very senior positions in insurance.

What is driving that?

PRIEM: Insurance companies are looking for alternative distribution systems, other than their very singular agency sales force. And banks are comfortable with multiple distribution systems. I am not counting on the insurance industry to absorb all of them, but it will help.

What are some other financial services professions that would make sense for these traditional bankers? Do any have a shot at investment banking?

PRIEM: Not really. Just ask yourself - look at Goldman Sachs, a premier investment firm - how many partners do they have? 200? And how many are over 50 years old? You can probably count them on my hands. Energy and a lot of smarts drive that area. You won't see the over-50 commercial bankers crowd cycling in to those firms.

What about money management? Is that too dissimilar?

PRIEM: No. There are opportunities there for bankers from a general management standpoint. Most money managers don't make good business managers. These money management organizations are getting pretty large, and you have to have an organizational structure and business management structure in place. They will look at people at the other parts of the financial industry, not to run money, but to run the company or become chief financial officer.

For those few commercial banks that are looking for top-level managers today, what are some of the qualities that they want to see on resumes?

PRIEM: For a large global institution, one of the key characteristics, if they went to the outside for chief executive, would be someone who has functioned before in a global environment.

We would look for executives who have lived and worked off-shore. That's very critical.

What about language skills?

PRIEM: Foreign language skills are important. But at this level, English is still the language of choice. Maybe not in a predominantly French bank, but more than likely it's a English-speaking culture.

Does a lot of hiring you are doing for banks involve investment product-related posts?

PRIEM: Yes. These are growth areas in commercial banking.

Banks are looking for someone who can build fee-generating services on the retail or wholesale side. At the end of the day, it's assets under management, so that they don't have to put up capital to support risk. The big battleground in the United States is who is going to control the retirement business - this is big time.

And the insurance companies want to control it, large asset-management firms want it, and the banks want a piece, too.

What about banking's current obsession with people who have marketing backgrounds. Is this a fad, or will it continue?

PRIEM: No, it will continue. There is an acceleration (of this trend), and (it's now happening at) smaller institutions.

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