Employee loyalty and retention NYC

Chances are, if you work in recruiting, HR or management in the financial service industry, you’ve already read this weekend’s eye-opening New York Times article, “A Mad Scramble for Young Bankers – Wall Street Banks and Private Equity Firms Compete for Young Talent” (if you haven’t, please do).

In a nutshell, it depicts a current environment in which the traditional investment banking/private equity career path has been completely upended since the financial crisis, with the most promising young talent being poached and nobody winning in the end (banks lose their talent early, private equity funds have to be far more cutthroat in their recruiting, and the talent themselves feel they are constantly searching for/missing opportunities).

It’s a sobering look at the state of New York City’s most important industry, and should give anybody who is concerned with retaining top talent pause.

What, then, will work?

Compensation and advancement opportunities play important roles in retention. There is a clear (if highly competitive) career path in the industry, and despite brutal workloads (up to 80+ hours a week for young analysts), we all know that people at all levels working on Wall Street make plenty of money. However, there is limited job security and workplace happiness in exchange. The article does mention how banks are seeking to retain their talent by offering 3-year contracts, rather than the traditional 2 years, and even full employment off the bat, as well as encouraging junior bankers to take off a few weekend days a month – but that’s apparently not enough to keep the best folks around.

What’s challenging about retaining top talent is that the best and brightest are, by their very nature, hungry & ambitious. They know they are in demand, and that they bring value to wherever they are employed. Even if you’re already providing a killer compensation package, clear advancement path, development opportunities and other perks/fringe benefits like team building activities and employee entertainment events, if they spot something that looks better, they’re going to leap.

And as the article shows, it’s only getting more competitive out there.

It’s definitely time for both investment banks and private equity funds to re-evaluate how they recruit & retain top talent. The moment is now to start asking questions such as, “What would make our young talent happy?” “What do they want that we’re not providing?” “What can we provide they don’t even know they want?”

It’s the companies that are seriously asking these questions that will win the competition for retaining the best talent.