Growth in Finance Is a Boon for Some, Bane for Others
Despite turmoil in international financial markets and consolidation of the domestic banking industry, the job market remains mostly bullish when it comes to careers in finance.
“Demand for people with expertise in finance is growing because the baby boom population is approaching retirement and that requires a great deal of financial planning and management,” says Charlotte Chamberlain, an analyst who covers the financial industry for Jeffries Group Inc., a Los Angeles-based investment bank.
This growth benefits some finance sectors more than others. In the commercial banking arena, mergers and acquisitions often result in employee layoffs. By contrast, mergers are a boon to the investment banking and accounting firms that put together the deals and can rake in hundreds of millions of dollars in fees.
“We’re going to hire as many undergraduates and MBAs as anyone in Wall Street and we’re looking in virtually every area of the firm,” says Peter Kiernan, a managing director at Goldman, Sachs & Co. who co-heads the investment banking firm’s recruiting. “That means Asia, Europe and almost every specialty. One of the hottest areas right now is the merger business. We did 95 deals last year of over $1 billion. That’s nearly two a week.”
At the Anderson School at UCLA, almost 40% of today’s graduates opt for jobs in finance, with the majority choosing traditional investment banking, according to Alysa Polkes, director of UCLA’s MBA Career Management Center.
The mean starting salary for corporate finance is $78,200 annually, Polkes says. Land a coveted spot in venture capital and that figure bumps up to $91,700, although jobs in this field are extremely competitive.
The consolidation of the investment banking industry casts a slight shadow. “The banks are still coming on campus, but maybe instead of interviewing 30 students, they’re interviewing 20,” Polkes says. “Overall however, it’s still a very attractive field and it will continue to be so. There’s consistent growth.”
Some industry mergers are expected to create jobs. The $18.3-billion marriage between Los Angeles-based retirement savings specialist SunAmerica Inc. and New York-based American International Group Inc., or AIG, a worldwide insurance giant, led to well under 100 layoffs.
Eventually, the firm plans to add hundreds of people to its payroll--especially at 2,500-employee SunAmerica, already the largest financial services firm headquartered in Los Angeles.
The future is less rosy for commercial bank growth. BankAmerica Corp. officials, for instance, suggested recently that they would pare up to 18,000 positions worldwide. That’s up from the 5,000 to 8,000 cuts that the company predicted last April when it merged with Charlotte, N.C.-based NationsBank Corp.
“If I were a credit officer in a bank and I didn’t have relationships with clients that would assure a viable profit picture for the bank, I’d be looking for a job,” says Al Osborne, a professor of business economics at UCLA’s Anderson School who is also a director of Times Mirror Co. “It is really tough now to find a credit-related career. The growth of business service banks, mortgage companies and capital markets has reduced the importance of the commercial bank.
His advice: “Transfer your credit origination skills to non-bank banks and mortgage companies.” Osborne says another good strategy he encounters in the classroom is commercial bankers who return to school to earn their MBAs and move into investment banking or other finance areas.
That’s not to say that there are no job opportunities at commercial banks.
Sanwa Bank California is currently looking for managers of retail branches, jobs that pay from $38,000 to $85,000 annually, depending on experience and the size of the branch. Sanwa is also in the market for commercial banking officers to handle business loans, and those positions pay from $38,000 to $100,000, says Susan Fowler, an executive vice president at Sanwa who is director of human resources.
To be sure, entry-level jobs in commercial banking pay much less. But unlike much of the financial industry, commercial banking is still an area where degrees aren’t required and many employees work their way up in the organization.
Fowler is one example.
“I’m an [executive vice president] and I don’t have a college degree,” she explains. “Most of our executives do have college degrees, and we prefer them, but experience is more important.”
What else does she want to see?
“We’ve always wanted real in-depth analytical ability, but the people side of the business--the customer relations and business development--is becoming more important because everything’s so competitive. The ability to develop new business, sell and retain relationships is really key.”
That’s exactly why Sanwa just hired Pamela Williams to manage its Wilshire Square branch in a diverse, mid-to-lower-income area of Los Angeles. Williams specializes in community outreach and development, honing those skills over a well-planned career.
After graduating from UCLA with a bachelor’s degree in psychology in 1981 and researching careers that would allow her to do community development, she began networking with banking officials, including the then-president of Security Pacific Foundation.
Soon she enrolled in a one-year management training program at Glendale Federal Savings (now CalFed) and then applied for and got a job managing one of their biggest branches in Westwood in 1986.
After learning all about S&L;’s, Williams realized she needed more in-depth commercial banking experience to get into community development lending. So she moved to Union Bank, enrolled in a training program there and learned small-business lending. She also completed a one-year training program at USC that taught her real estate and community development lending.
Eventually, she became branch manager at Union Bank’s Westwood office. Meanwhile, she also took UCLA extension classes to hone her skills and stay current. That made her desirable to Sanwa. Williams continues to sit on the board of several educational and nonprofit housing organizations and is well-known in the community.
“Especially now, with all the fluctuations in the banking industry, you have to get out there and network and constantly hone your skills and education to keep yourself on the cutting edge,” Williams says.
That can help when banks are laying off in some fields and hiring in others. Washington Mutual Inc., which in October acquired Home Savings of America, is expected to eliminate 3,500 positions at Home Savings but hopes to move some of those people into 800 jobs it currently has open.
Bank spokesman Tim McGarry says the firm is looking for business banking experts and commissioned agents to sell residential home loans. The bank is also recruiting for numerous entry-level positions, including tellers, new account representatives, deposit and loan servicing and telephone banking. A call-in center in the west San Fernando Valley, for instance, is expected to surge from 350 to 600 employees this year.
