I have not yet been asked to work with an investment bank to assess the impact of the bonus debate on existing employees, potential recruits, investors and other stakeholders. Why are they not using every argument to demonstrate why substantial bonuses are vital and show that successful bankers are heroes rather than greedy ogres?
To date most bankers seem to use just one response to their critics namely that unless restraint is global they will lose their talent to other financial centres. I don’t buy this – successful bankers who have set down roots in London have a full and varied life living in the finest urban property in the world and enjoying the social and artistic life of this great city. Any confidential research amongst bankers and their families would indicate that London is a very hard place to leave.
Why don’t they use much more powerful arguments? All I can conclude is that they do not exist and Sir Philip Hampton’s TV message last week was correct ie yes there are some brilliant people but the rest are journeymen. If so then small wonder that obvious rebuttal points do not get made. Yet, if this is a trade worth defending then they should form a key role in the defence.
Here are a few I have simply made up which if true would make quite a hard hitting defence eg
1. The colossal margins eg such as those which enabled Morgan Stanley to afford $16bn in salaries, bonuses and benefits in 2010 are only achieved by a few outstanding firms. The majority of bankers do not deliver results like these and the corporate and personal career risks are great. As with sportsmen and musicians there are only a few outstanding performers amongst the thousands who take part.
2. The competition for customers is intense. If all bankers earned these margins then the self correcting principles of capitalism would ensure that new competitors would rapidly enter the market and bring margins down.
3. To be a successful banker requires quite extraordinary and rare qualities eg professional skills like accountancy, an MBA, a first degree First and outstanding commercial and interpersonal qualities. This evidence only gets you an interview – the rejection rate is over 90%
4. This is not a long term career and top talent must make money when it can. There is a long time in education and training and then perhaps only 15 years of really productive work. ’50 on Wall Street is old’ really is true.
5. The burn out/drop out rate for Bankers is crippling. The employee turnover rate for qualified bankers is over 35% pa.
If the above were true Bankers rewards would be understandable but presumably none of it is otherwise the average rewards for a large investment bank would be nowhere near the £269,000 per head which Goldman Sachs paid out in 2010. I have just read a glowing report on the level of engagement and commitment in Goldman’s UK business. With such a level of average earnings that is not surprising yet don’t these talented employees sometimes wish that their leaders could defend what they are paid rather better? In the meantime I’d be interested to know what they say to friends and family.
If there are powerful arguments based on the realities of this market then let us hear them - otherwise observers will fill the vacuum with the thought that they really are just overpaid journeymen in a category ripe for change.
Simon Barrow
Tuesday, January 25, 2011
Wednesday, January 5, 2011
Why can't Waitrose run our public services?
Now here is a blog about a real Employer Brand
On Christmas Eve, I succeeded in getting a rubbish skip removed; the driver, noticing a Waitrose wine case, said ‘Ah, you’re a Waitrose man’. I mentioned free delivery and competitive prices. `Fair enough’ he said, adding that three members of his family worked for them at Saxmundham; ‘they’re all happy – Waitrose is a good employer.’ When I said I was going there that afternoon, he said `say hello’ to his son Ben in the wine dept.
That visit gave me five positive experiences stemming from helpful advice given in a warm, spontaneous, natural spirit by people who really seemed to be enjoying their jobs. True, it was Christmas Eve, but that’s no guarantee of a benign, constructive response. I remember once doing a student job delivering drink, working with a driver who described the season as ‘nothing more than a f….g booze up ’.
So: why were they all so positive?
- they were working for a successful business – well, so are lots of big retailers but there was something else about working there;
- perhaps because, they are part owners of the business, Waitrose being part of the John Lewis Partnership?
- perhaps because there’s a greater sense of fairness with everyone getting the same percentage bonus on their basic salary? Plus rewards at the top, though handsome, are not at the stratospheric levels in other organisations;
- perhaps, being decently managed, they pass on that sense of decency and work as team players? With Waitrose employees bringing out the best in their customers and vice versa;
- With people like this most of us would think twice before raising a bad tempered voice – you don’t easily lose it with people doing their best. In any case the management's careful planning and implementation probably means there is little to cause rows. This is a disciplined place.
If I had to select the key Waitrose attributes they would be a) the basic human qualities of the people they recruit b) the sense I get that how Waitrose management behave is how they the partners want to behave c) the clarity and expectations of the actual employment experience and the confidence in the strategy on which it is based
As I drove home I wondered why more organisations don’t prompt me to feel this way. If Waitrose ran the railways, local government, education and health would not their employees and their customers be a lot happier? In addition I can think of several commercial businesses where the bedrock of the actual experience does not stand out for all it touches in the way it does here. If you need to spin your way to an Employer Brand you’ll never make it.
Simon Barrow 5th Jan 2011
On Christmas Eve, I succeeded in getting a rubbish skip removed; the driver, noticing a Waitrose wine case, said ‘Ah, you’re a Waitrose man’. I mentioned free delivery and competitive prices. `Fair enough’ he said, adding that three members of his family worked for them at Saxmundham; ‘they’re all happy – Waitrose is a good employer.’ When I said I was going there that afternoon, he said `say hello’ to his son Ben in the wine dept.
That visit gave me five positive experiences stemming from helpful advice given in a warm, spontaneous, natural spirit by people who really seemed to be enjoying their jobs. True, it was Christmas Eve, but that’s no guarantee of a benign, constructive response. I remember once doing a student job delivering drink, working with a driver who described the season as ‘nothing more than a f….g booze up ’.
So: why were they all so positive?
- they were working for a successful business – well, so are lots of big retailers but there was something else about working there;
- perhaps because, they are part owners of the business, Waitrose being part of the John Lewis Partnership?
- perhaps because there’s a greater sense of fairness with everyone getting the same percentage bonus on their basic salary? Plus rewards at the top, though handsome, are not at the stratospheric levels in other organisations;
- perhaps, being decently managed, they pass on that sense of decency and work as team players? With Waitrose employees bringing out the best in their customers and vice versa;
- With people like this most of us would think twice before raising a bad tempered voice – you don’t easily lose it with people doing their best. In any case the management's careful planning and implementation probably means there is little to cause rows. This is a disciplined place.
If I had to select the key Waitrose attributes they would be a) the basic human qualities of the people they recruit b) the sense I get that how Waitrose management behave is how they the partners want to behave c) the clarity and expectations of the actual employment experience and the confidence in the strategy on which it is based
As I drove home I wondered why more organisations don’t prompt me to feel this way. If Waitrose ran the railways, local government, education and health would not their employees and their customers be a lot happier? In addition I can think of several commercial businesses where the bedrock of the actual experience does not stand out for all it touches in the way it does here. If you need to spin your way to an Employer Brand you’ll never make it.
Simon Barrow 5th Jan 2011
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