SOUTHERN CALIFORNIA JOB MARKET : A SPECIAL REPORT ON EMPLOYMENT TRENDS : INDUSTRIES & OCCUPATIONS : BANKING : TECHNOLOGY CREATES NEED FOR VERSATILITY

After decades of being virtually somnambulant, the banking industry is waking up. As a result, the potential for creative, interesting jobs may be brighter than ever.

The twin forces that are driving the industry to shed its sedentary ways are deregulation and technology. Those same forces are creating a strong need for a new type of bank employee, one who is more adept at communication, unafraid of technology and sales-oriented, according to industry experts.

“Banking has moved from the stodgy, once conservative, goose-stepped environment to one that is dynamic and changing, with so many opportunities available that an employee has the ability to choose the job or career path that is right for them,” said Stephen A. Enna, senior vice president and personnel director for Wells Fargo & Co. in San Francisco.

Enna’s evaluation of the banking field, which was echoed by executives at other California banks, reflects similar changes that are sweeping other financial-service industries.

Accountants are no longer relegated to simply performing audit after audit. Instead, they may find themselves analyzing the fine points of a merger proposal or doing a sophisticated diagnosis of a company’s financial health. An investment banker may find that his or her duties extend beyond the next merger or leveraged buyout to sophisticated restructuring of entire conglomerates.

Statistics from the Labor Department show that jobs in the financial field are growing at a steady rate. For instance, the financial category added 109,000 jobs nationwide in the first quarter of 1987, according to the Labor Department, surpassed only by the business and retail trade categories.

In California, the growth in financial services jobs should be strong well into the next decade as a result of the emergence of Los Angeles as a gateway to the Pacific Basin and the opening of the state to full interstate banking in 1991, which will allow the big New York banks to open their first complete offices here.

“For California people, the prognosis for a healthy job scene in banking and similar fields looks good,” said James McN. Stansill, a professor of finance at the University of Southern California. “The big Eastern banks will be moving out here, and they’re not stupid. They are going to try to hire some people with local contacts.”

In addition to the influx of out of state banks, California financial institutions--both banks and savings and loans--are already working to strengthen their operations here in preparation for the competition. While that does not mean dramatic growth and thousands of new jobs, it does mean that these institutions are looking for more flexible employees.

Enna described the type of person Wells Fargo, and most other banks, big and small, are looking for in new hires:

“For the first time, as a result of deregulation, banks are having to compete. Therefore, the skill base we are developing in employees is one in which somebody is capable of selling a product on the open market. We are looking for people with specialized skills or people who have great sales skills or potential in order to sell a product in the retail market.”

In fact, specialized skills are more important than ever, because automation has replaced thousands of bank employees who did the traditional back-office, clerical work now accomplished by machines. Entry-level jobs still remain, of course, but even today’s teller may be expected to be more than someone who simply cashes checks and handles deposits.

The ideal bank employee is able to communicate, both orally and in writing, and is comfortable with that new technology, ranging from computers to automated teller machines. The ideal employee is likely to view the bank as a retail outlet, with an emphasis of selling its products to the consumer.

Whether the prospective employee has a doctorate in international economics or a high school degree, Enna said that there is a premium on flexibility.

“Banking doesn’t lend itself to a bunch of stereotyped people anymore,” he said.

In return for that flexibility, banks are willing to pay better, although the compensation may not be in traditional terms of a set base salary. More and more banks today are pegging total pay to a smaller base salary that is augmented through bonus incentives based on performance. It means that more money is available to those who are willing and able to do the job, and those who can’t are destined to earn less and probably be forced out of their job.

“The traditional feeling about banks was that the jobs were low-pay but very secure,” Enna said. “Banks now need to do whatever is necessary to compete, and more and more of that involves emphasizing flexible compensation plans rather than just base pay.”

Jerry L. Bowman, a senior vice president at Bank of America, said a sales mentality is no longer merely optional behavior for bankers in the era of stiff competition that deregulation has brought.

“We have charged our branch managers with building a sales organization,” Bowman said.

Part of developing the sales mentality, he said, involves recruiting people from other industries, such as insurance, manufacturing and apparel, to add another dimension to the bank’s sales force.

In one instance, Bowman said, a branch manager formed a marketing committee consisting of the branch administrative officer, tellers and a representative from the new accounts department. With a “sales emphasis,” the branch was operating 112% above its goal at mid-year, he said.

The emphasis on tying compensation to individual achievement is nothing new for the securities industry, where brokers and investment bankers have long had their incomes tied to commissions and bonus plans. And that certainly has not changed.

“We have a saying here when it comes to who we want to hire,” said Marshall S. Geller, managing director of the investment house of Bear, Stearns & Co. in Los Angeles. “We like to hire PSDs. That stands for people who are Poor and Smart with a deep Desire to get rich.”

In the last five years, Bear Stearns has doubled its size in Los Angeles to about 400 employees, making it one of the largest securities operations on the West Coast. There are about 160 professionals in the sales and trading side of the business, about 70 professionals in the corporate and public finance and real estate areas, and the remainder are support personnel.

The best-paid new hires in the securities industry are the investment bankers, who almost always have a masters of business administration degree and, at a company such as Bear Stearns, would probably be expected to have two or more years’ experience in the business world. Geller said starting salaries for investment bankers vary according to skills and strengths, but he added: “Few people are starting at less than $50,000 to $60,000.”

Stansill, the finance professor, said that most of USC’s MBA graduates who go into investment banking start at precisely the salary range described by Geller, and he pointed out that their earnings can climb very quickly after that.

“The second year, their total compensation, including salary and bonus, is likely to go to $100,000 to $150,000, and in the third and fourth years, it can be multiples of that, depending on performance and the profitability of their firm,” Stansill said.

In the last few years, most of the major New York investment banks have opened or expanded offices here as Los Angeles has emerged as a major financial center. And Stansill said those firms are more and more often choosing hometown people.

“Survey after survey has shown that New Yorkers don’t like to come to L.A., so the investment houses are getting L.A. people, sending them to New York for six months or so, and then returning them here,” he said.

But only the top MBA students at the top schools land jobs in the glitzy world of investment banking.

Stansill said other MBA graduates are finding interesting challenges and almost as much pay by going to work in the investment banking departments of commercial banks.

“People who may not be able to get a job with a First Boston (a leading investment house in New York) are finding themselves making very nice money with a commercial bank,” he said. “The banks are starting to pay like investment houses because they are competing with those houses and require similar skills.”

As for those who graduate with a bachelor’s degree in a business-related field, Geller said that they are more likely to find a starting job in the retail brokerage or institutional sales departments of a securities firm, where the pay can also be lucrative even if the job is less glamorous than pure investment banking.

For someone with a bachelor’s degree seeking to enter the securities field, some of the experts suggest trying to land a job at one of the large retail brokerages with an excellent training program, such as Merrill Lynch & Co., E. F. Hutton & Co. or Dean Witter Reynolds Inc.

But Stansill had another suggestion.

“People with bachelor’s degrees can get a short-term job as an associate or analyst at a securities firm and get a deferred admission to a graduate school,” he said. “Then they can work for a couple of years to gain experience, go to graduate school and then go into the market for a big-ticket job.”

Some have decried the rush to Wall Street by the nation’s leading MBA graduates, worrying that the nation’s industries will be left without top-flight managers. Others have expressed concerns about the taint of the insider trading scandals in New York.

But Stansill said nothing has diminished the allure of Wall Street at USC, where two-thirds of the MBA students are majoring in finance.

“When you talk about the kind of money they can make in the deal business, compared with the need for corporate managers, students say: ‘What? Are you kidding? I’ll go where the money is.’ ”