Swiss financial industry trends are heavily influenced by Wall Street. One of those is that nationality increasingly plays less of a role when looking for a banking CEO, Gary Goldstein, headhunter and ultimate insider of New York's financial mecca tells finews.com.

Credit Suisse has recently refreshed the ranks of its senior management team with hires from Irish and American competitors, but the most important positions at the ailing bank are still in Swiss hands. It is presided over by Axel Lehmann, who in turn holds a protective hand over beleaguered CEO Thomas Gottstein. And while this dual Swiss leadership may have a reassuring effect on the home market, from an external perspective, it appears to be the exception rather than the rule.

In this regard, the global perspective of Gary Goldstein, co-founder and group CEO of Whitney Partners, a leading executive research firm on Wall Street, provides interesting insight. Intimately connected within the U.S. financial mecca, he has worked closely with Zurich-based partner firm Schulthess Zimmermann & Jauch for years, and not without reason. «When we talk to clients today, we have to show them that we can recruit globally», says Goldstein in an interview with finews.com.

Barriers Coming Down

Barriers to entry to individual financial centers and companies are coming down. While language skills and cultural understanding continue to be important criteria, nationality, however, is becoming less of a deciding factor in finding the right candidate for a leadership role.

«Companies can focus on a specific region or experience in a business area, but also on know-how in dealing with the transformation of business models and digitalization.» If these factors were added to the search list, then suddenly someone would be found on it who had not been considered before. So if someone is looking for a new CEO today, it's worth expanding the search pool, Goldstein says. 

Filling the Talent Pool

But the question now is how well that candidate pool will be filled in the future. As in most areas of finance, trends in the «war for talent» are first tested in the Wall Street crucible. What Goldstein observes there in the wake of the pandemic of the past two years indicates troubling times for the industry's recruiters.

The «kids,» as he calls them, that started during the pandemic were deprived of the corporate culture. Instead, they worked from the basement of their parent's house or from a tiny apartment in the city which they shared with five other people. At the same time, the business has become much faster thanks to video chats and the Internet. With the catch-up effect, especially in investment banking, young bankers have been buried under 120-hour weeks.

«The last few years have been extremely tough on young bankers,» Goldstein says.

Just three months after starting work, he says, many rookie bankers threw in the towel and quit, leading to «a real rush out of the investment banks, hedge funds, and private equity firms,» according to Goldstein. One problem is that the junior bankers are harder to replace than one might expect. Just as they were starting to get into their training, they would leave, with the bank having to start the process from the beginning, something that was not sustainable, he says.

Accordingly, the major Swiss banks have tried to keep their young talent from jumping ship by offering special compensation, with Credit Suisse even offering a $10,000 «lifestyle bonus.»

Poaching on Other Lands

But in the realm of high wages, such a bonus is not enough to convince everyone to stay. Meanwhile, US banks have resorted to poaching from law and audit firms, Goldstein notes. Meanwhile, the quality of the work has declined, he says, citing reports from the institutions, because «You can't squeeze that kind of training into a few months.»

It's no accident that Wall Street bigwigs such as J.P. Morgan CEO Jamie Dimon are now ordering all employees back to the office. The work there may still be hard, but at least there is now the camaraderie among their peers that makes the effort worth it for young bankers. Goldstein surmises that, despite the experience with remote work during the pandemic, only long-serving managers will be given free rein as to where and how they work in the future.

Accustomed to Exorbitant Wages

And, finally, there is something else Wall Street bankers should not get used to, which is year's exorbitant wages. «I think by the end of the year, wages will be something to talk about,» says the headhunter. «People were making several multiples than what they were used to for 2021,» Goldstein explains. «Now I think banks will want to get back to more normal pay levels.»

That's likely to have an impact on the big banks here, UBS and Credit Suisse, which often benchmark themselves to U.S. banks in their renumeration packages. «By definition, Swiss institutions will import this trend if they have set American institutions as peers,» Goldstein concludes.

Collaboration: Samuel Gerber / Marco Babic