It's a rare bank chief executive who hasn't uttered something sometime about banking being a "people business." But recruiters are saying that any more, big-time banking has a people problem.

It's not necessarily a crisis - unless you're at a bank where downsizing consultants are roaming the halls. But several recruiters suggest that bank personnel are working harder, and under tougher conditions, than ever - and that some corporate policies have the unintended effect of building tension and making it harder to keep top performers.

"We found many banks are so focused on expenses that they are in denim about the growing crisis in business retention or are unrealistic about what is needed in terms of compensation to hold onto their big producers," says William Venable, a vice president at New York recruiting firm Thorndike Deland Associates. These specialists "are the originators of business," and the good ones are far scarcer than the generalist corporate lenders of yesteryear.

That's especially true in specialized positions in capital markets and lending areas like loan syndications, where top people are in high demand. More and more, major customers are moving their business to rival banks or securities firms where their specialists are relocating, Venable says.

"To succeed in the global market, banks must keep specialists in front of the client or lose the relationship to other, more aggressive banks," said a senior manager at a Canadian bank surveyed by Thorndike Deland.

Meanwhile, with downsizing entrenched, the survivors are usually working harder - and under more precarious circumstances. "Reorganization can be especially challenging for middle managers, who are often placed in the difficult position of acting as targets and agents of change simultaneously," says Bob Marshall, head of the Marshall Group in Scottsdale, AZ.

Individual productivity is becoming the defining criterion of managers in most professions, not just banking, says Dale Winston, president of Battalia Winston International in New York. "We no longer pay people simply to manage other people. You have to be a producer," she says.

And top producers do command top salaries. "Competition for managers with the requisite skills is at its keenest, and we are effectively held ransom by the short supply," a senior executive in Europe for a top global bank told Thorndike Deland.

Flattening a banking organization shaves costs but means "less staff depth and fewer people to protect one's competitive flanks vis-a-vis key customers," Venable adds. He says his firm's survey showed that the departure of a key relationship manager can halve the success rate of obtaining high-margin business. But paying these stars more - especially in the form of signing bonuses, or "golden hellos," as Venable dubs them - can create all kinds of resentment, and calls for the smoothing of a lot of ruffled feathers, not an easy task in the best of times.

What banks increasingly face is the tension between efforts to build loyalty and employees' recognition that job security is fleeting and that going to the highest bidder may make more sense than hoping for the best in a negative, downsizing environment. Unless banks can satisfy their best people - in monetary and psychic terms - the stars may cross the street, making the organization both smaller and poorer.

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