Bank on Banking

Several friends have asked me whether I would take a job that pays less (marginally, or significantly), or offers less career advancement, for a position that promises (for what it’s worth) a better work-life balance or, more commonly in today’s market, a more job-secure environment. With “displacements” either just completed, due later in the year, coming up quickly, or hours away, no one working in investment banking for a bulge bracket firm feels completely safe (or at least as safe as they felt 2 years ago).

So, what’s a banker to do? Well, the answer is…. I wish it were that straightforward. Unfortunately, it’s never an easy “you should quit,” or, conversely, “you should stay,” but rather a series of questions and judgment calls to make in order to rationally decide which path is the better path. Below, are 4 of the most important questions (with more to come in a future post) to ask yourself when trying to determine whether to stay or go. Remember, anyone can ask themselves these questions and sell themselves the answer that is easier to run with, but being honest with yourself will pay off far more than simply tossing a coin and crossing your fingers.

Question 1 – Does my team like me more than the other analysts, the same as the other analysts, or less than the other analysts?

This is one of those questions that no one wants to answer truthfully, but doing just that can really help steer you in the right direction. When I use the term “like,” I’m referring to how well you get along with them, and, perhaps more importantly, how much in common, i.e. hobbies and interests, with the bulk of your team in general and in comparison to the other analysts in your group. The reality of this business is that personal interests often play a bigger role than quality of work produced (unless DRASTICALLY different) in who stays with the team and who is let go.

Question 2 – Is this the last round of layoffs, or, is this round somewhere in the middle (or even worse, beginning) of a probable series of rounds to come?

Sure, you may feel pretty good now, maybe you even felt pretty good last round, but for many people, the ever-looming right-sizing is enough to dampen spirits, slow work enthusiasm, and sometimes even cause ill will and depression. Depending on whether you are an optimist, and, more importantly, willing to stay the course and remain committed to the platform when many others sour, will help to determine whether your place of employment is really the right place for you at this time. Can you handle multiple rounds of layoffs, doom and gloom floor sentiment and possible pay/bonus cuts without becoming depressed and miserable – if you can’t honestly say yes, it’s time to consider other alternatives.

Question 3 – Is the potential job change in the field of banking, or, if not, does the job offer a clear path back to banking (or Business School if that’s your plan)?

Moving to a competitor, a boutique investment bank, a P/E shop, an advisory shop, a consulting firm or even a hedge fund, will offer a path back into investment banking in the future, as well show as a logical and challenging next step to graduate schools. Moving into research, operations, or commercial banking will both lack in perceived analytical challenge, as well as the clear path back into banking or into private equity when the market returns. Furthermore, if business school is your “next step,” make sure that you are passionate about, and eloquent in describing your interest in these fields as you will be questioned as to why you decided to leave banking to pursue operations, or leave private equity for the perceived less challenging field of commercial banking. Making this sort of a move without calculated justification can easily be viewed as a sign of lacking confidence, or, perhaps worse, not having a clear vision of your goals.

Question 4 – Can you survive with a cut in pay and how will it be perceived by those who will look to hire you in the future?

The first part is simple: you know how much you need to service your debt, and monthly expenses, plus a fraction more. Be realistic, and cut out the models and bottles, then determine how much you really need to survive and have a bit of fun. Everyone in this business loves money, but as an analyst, there is plenty of time to make it – so don’t become fixated on a few dollars and pass up a great opportunity.

Regarding the second part of the question, remember; every time you start a new position, not only does that job go on your resume, but your responsibilities in that position, as well as your new annual salary are all viewed as benchmarks by hiring firms/future employers. If, for example, you were making $80,000 per year, without bonus, and have now accepted a position earning $65,000 per year, that $65,000 per year has now become your target salary according to future employers. However, if you preface that $65,000 salary with an explanation detailing how they usually start people in your position with $45,000 per year and you have a guaranteed bonus that far exceeds the norm for people in your position with the firm, then you can possibly play that to your advantage. The $65,000 per year is no longer a haircut on your previous salary, but rather a credit to your capabilities, one which would need to be matched by a future employer if they are to poach you from your current firm.

Remember, it’s not always about the money, but at the end of the day, money makes the world go round – make your decisions wisely and keep your future career moves in mind to ensure that you are making the best decision. Keep an eye out for future posts on surviving the tough times to rock the good ones, tips and tricks for your interview, the phone interview and how to nail it, and much more!