U.S. Managers Find Career Paths at Foreign Banks
In the go-go 1980s, foreign institutions received nary a notice from U.S. bankers who were looking for jobs. But thousands of layoffs later, more than a few of these executives are reexamining their career options.
Some still maintain they would work at foreign banks only as a last resort. Among the reasons most frequently cited are potential problems with language, inferior compensation packages, and a lack of career growth potential.
But many foreign banks are taking steps to address these perceived shortcomings. And because of their strong financial outlook, the job security they offer, and other counterbalancing factors, recruiters are finding in some cases that foreigners have become employers of choice.
Better Capital Position
The established foreign banks generally have many fewer financial problems than their American counterparts. Because they were much less aggressive lenders in the past, they operate from a strong capital base while some U.S. money-center banks find their ratings shaky.
R. Kevin Hughes, first vice president for human resources with Societe Generale in New York sees the distinction like this: "We have the ability to do a lot of business the U.S. banks are shying away from. We can lend money in a difficult time in a difficult market. CFOs welcome us now because they know we have the money and we have the sophistication.
Mr. Hughes says it used to be "a struggle" to get the quality people the bank wanted. "It was almost a mercenary issue - we were paying a premium to attract the talent he wanted. I don't think we have to do that anymore. We are inundated with unsolicited resumes, and they are generally more competent people than we were seeing only a few years ago."
"Bankers are by nature risk-averse," says Gonzalo de Las Heras, advisor to the chairman of Banco Santander in New York. "They may see staying in their own banks as too risky because of the shape many American banks are in.
"Consequently, there's plenty of talent around right now and we're getting a chance to upgrade our staff with quality candidates."
Moreover, foreign banks have built on these strengths by making some internal changes to counter negative perceptions in the marketplace such as inferior compensation packages and lack of opportunity for advancement for Americans with foreign banks.
Recruiting Americans into the ranks is not a hard sell, according to Gary Parker, first vice president at Dresdner Bank in New York.
"Before I joined the bank in 1988, having only worked for American corporations, I had a number of concerns. Foreign banks had the reputation for not paying as well as some of the money-center banks. I was concerned that they wouldn't be a long-term player in this market, and worried about possible language requirements. I haven't found any of these concerns to be a valid problem."
What Mr. Parker has found, having come to Dresdner Bank from a major American bank, is a distinctly different culture.
"I have never worked for a place where there was such a sensitivity for human beings and their needs. There is this feeling that our people are very important, that our success is a result of their efforts. They are why we are where we are today."
Indeed, there do seem to be some very basic cultural differences between European and American banks, and corporations in general, that directly impact the day-to-day working life of employees. While many American corporations pay lip service to the notion that people are their most important asset, European corporations are more likely to practice what they preach.
European companies tend to protect and nurture their human assets by having much more generous policies regarding vacation and personal leave. While employees are expected to give their all during their working hours, the company also recognizes the importance of the human dimension and the fact that people need time for their personal life.
Not a Quarterly Mode
The fact that foreign banks and other corporations are not as strongly driven by quarterly earnings is crucial to understanding what makes them different from their American counterparts. A foreign bank that has made a commitment to the U.S. market is not about to change its strategy four times a year; results and success are measured by years, not by quarters.
The reduced quarterly pressure also allows foreign banks to resist the temptation to hire in good times and fire in bad times. A great deal of time is invested in identifying, attracting, and training first-class managers to be part of a team, and there is the feeling that once you have good people on board, you don't let them go; they ride out the bad times with you, then, when business picks up, they are there, where you need them.
This commitment on the part of foreign banks to their staff is returned by a brand of loyalty to the institution that has all but disappeared in American companies, where people are often as expendable as any other resources.
Salary Not Everything
While American companies tend to think that the best recruits go to the highest bidder, evidently there are other factors that come into play. Compensation packages may be vastly different at foreign banks. Foreign banks have the reputation for paying less than American banks, and to a certain extent, that is true.
While salaries below the $150,000 level are roughly competitive, bonuses tend to be minimal since there is much less of a risk-oriented approach to compensation. However, this discrepancy is partially balanced out by the fact that contracts at foreign banks provide much greater security, and often more fringe benefits. In addition, in the smaller, more intimate environment of a foreign bank an individual manager may feel like he has more of an impact, not like just a cog in the wheels of a giant corporation.
"Compensation is not right up there with money-center banks," says Mr. Parker of Dresdner Bank, "but foreign banks are smaller and jobs are less specialized. If you're doing a deal, you're involved in everything from soup to nuts.
Flexibility in Demand
"I wouldn't exactly say we are looking for generalists, but more of a shirtsleeves type of corporate banker - someone who can do everything from filling out an application to seeing something through the credit committee.
According to Mr. Hughes, changes implemented by Societe Generale in the United States in recent years have helped to place compensation much more on a par with its American competitors. Such American customs as bonuses and pay for performance have found a home at the French bank.
As the well-established foreign banks in the United States have been able to successfully recruit and integrate Americans, many of these institutions are becoming more Americanized themselves. Far from just having a few token Americans on board, most are reducing their expatriate cadre, creating more openings for Americans.
"Let's face it," says Mr. de Las Heras of Banco Santander, "the history of foreign banks in the United States is rather dismal. One cannot come here and just transplant a foreign culture and foreign talent and hope to do business successfully.
"Americans are in demand by foreign banks for several reasons. We are all now basically following the American model - systems, accounting, procedures - we're doing what American banks began doing 20 years ago. Also, American business school training is in great demand, as is knowledge of the American market."
One bank actively pursuing young American talent is Dresdner Bank, which recruits top summer interns on college campuses, then sends them to Frankfurt headquarters, all expenses paid, to work. Promising candidates are evaluated with an eye toward offering them future full-time employment.
A Change of Procedure
Similarly, top business school graduates are identified and recruited to be trained at Frankfurt headquarters. These initiatives represent a dramatic change over only a few years ago, when there were few non-German nationals at corporate headquarters.
Mr. de Las Heras says that Banco Santander, too, is becoming much more international, even at headquarters. But for the time being Americans are not seen as particularly valuable as part of the team.
PHOTO : T. LEE POMEROY 2d said U.S. execs are reviewing career options.
Mr. Pomeroy and Mr. Taylor are principals with Egon Zehnder International, a global consulting firm that specializes in executive search.