Investment banking: Groomed for future greatness
City banks are trying to improve their retention rates of staff by using 'talent managers' to cultivate graduates. Kate Hilpern reports
Thursday 12 October 2006
Mention a career in investment banking and the first thing that springs to most people's minds is big bucks. But in a market that is becoming ever more competitive and cut-throat, employers are realising they need to find other ways to attract the cream of graduate crop before their rivals do. Enter talent management. So what exactly is this new offering, where did it come from and where can you find it?
"People know that what really counts is how people perform and it can leave them wondering to what extent the banks really care about their wellbeing," says Chris Archer, head of financial services at HR recruitment and talent management firm Macmillan Davies Hodes. "The fact that, historically, banks have been very quick to exit staff in a downturn has added to this perception."
But since investment banks have begun fighting for the brightest and best graduates, they are acknowledging that they need to be seen as a more attractive option, says Archer. Investing in people's long-term plans - otherwise known as talent management - has become a key way of achieving this. In fact, it is no longer uncommon for banks to have dedicated talent teams.
James Fallon, director of employment agency Interim Performers, says that talent management is also seen as a retention tool. "At middle and senior level, there can be quite an exodus of people from investment banks moving to places like smaller investment management firms. Naturally, banks are increasingly looking for ways to stop this happening."
At Deutsche Bank, talent management includes graduates being guaranteed a continuous development programme with a three- to five-year time line. "We are also very committed to educating our managers so that they are equally focused on developing and retaining talent," says Angela Cassidy, global head of graduate training.
Many employers are focusing on the initial training that graduates receive - ensuring that it stands them in good stead for the long run. Steve Gardner, HR consultant at CIBC, explains: "Our graduate rotation scheme takes in the whole of the front office. So while most banks give an option of working on the trading floor or in corporate finance, our scheme allows for both. This 'try before you buy' approach is, in our opinion, an excellent way of managing new talent."
For Alan Someck, who started on the graduate scheme last year, it actually led him to change his career path. "Before I joined the bank, I thought I'd be more attracted to trading. But when I did part of my rotation in leveraged finance, I realised my skills would be more suited there."
Gardner adds that CIBC's strong emphasis on objective setting is also popular with graduates. "Everyone is set objectives at the beginning of the year, which are reviewed at the middle and end of the year." The bank's commitment to what he calls '360-degree feedback' is equally effective, he says. "It means performance reviews aren't just about getting a school report, but you hear back from your peers and others."
Investment banks have also been looking at how they can encourage internal job mobility among their workers, thereby ensuring that they remain challenged and stay with the business. Merrill Lynch has a dedicated jobs intranet and has set up networks to encourage more applications from women and people from minority groups. In fact, diversity is an area that all the banks have been looking at closely as a way of attracting and hanging onto talented people who may have been overlooked in the past.
Goldman Sachs offers diversity programmes across the firm. One example is an initiative that targets the female associate population. Claire Goodeve, associate in the financing group in the investment banking division, says: "There were three angles to the training. One was technical skills - things like merger modelling and advanced accounting in which you need to crunch the numbers accurately and do a great job. The second was leadership skills - things like presentation and negotiation skills that are maybe less tangible but are also extremely important to master as you step up in the organisation. The third angle was networking - meeting new people and building a global framework of colleagues. This really facilitates expanding your sphere of influence which is crucial as you become more senior."
Goldman Sachs also has an "internal mobility" website, which carries virtually all the firm's vacancies. Tom Osmond, executive director, adds that Goldman Sachs University offers about 2,000 different programmes, covering everything from markets and products to leadership and professional skills to programmes on navigating the firm's distinct culture. "About 95 per cent of our employees took at least one course offered by the university last year," he says.
When it comes to talent management among fresh graduates, the firm - along with many other investment banks - prides itself on a mentoring and buddy scheme. Meanwhile, the Royal Bank of Scotland - which, while not a pure investment bank is in the same market - focuses on coaching. "We have taken the view that we graduates are key to the future of our organisation, therefore you don't want to lose them," says Neil Roden, HR director. "Since today's graduates are generally very interested in their own development, employers in this sector can no longer afford to only look at salaries as a way to hook them in. In fact, I think talent management will only get bigger."
Mark Pettman, director of Michael Page City, agrees. "I think banks have no choice, particularly as graduates no longer just think about investment banking now, but also other careers such as marketing, HR and accounting."
'You feel that you're not just another body among hundreds of others'
Avril O'Malley, 27, is a sales analyst at Lehman Brothers
Jobs in investment banking are pretty standard across the board, so I chose Lehman Brothers based on its good social culture and the fact that they seemed so committed to their graduates' professional development and long-term career aspirations.
The fact that I've been moved to so many different departments in the four years that I've been with Lehman is evidence of this. Once you learn a role and have done it for some time, you can get fed up, but Lehman are obviously keen to keep their graduates stimulated and challenged.
There are also internal job postings, which are sent by e-mail from each division once a month - again, so that the workforce remains challenged and stays with the business.
Particularly beneficial to me has been Lehman's mentoring programme, which teams up junior people like me with a senior person. You can approach them about problems you don't want to talk to your line manager about.
I've also been impressed by Lehman's commitment to hanging onto female talent. If you're a woman in investment banking, it can be hard to have a family and stay in the industry because of the long hours. But Lehman have been trying to come up with initiatives for retaining mothers - for example through job-sharing. Meanwhile, one woman I work with had twin girls last year and she gets to leave at 5pm on the dot every day.
There is a very low turnover, and I'm not surprised. You really feel that the company cares about your wellbeing and that you're not just another body among hundreds of others.
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