SAN FRANCISCO — It’s a chart that should have every manager on Wall Street worried.
According to a survey of over 1,000 banking employees by strategy consulting firm Quinlan & Associates, more than a third (34%) of finance employees are planning to leave their current role in the next two years.
A further 37% are undecided, with only 29% committed to staying at their current employer.
The survey is part of a 107-page report into a “talent crisis” in the banking industry, with top students increasingly seeking out careers in other fields, and retention rates falling.
“We are consequently left in a situation where the talent pool is running thin due to a simultaneous reduction in new entrants and increase in leavers,” the report said. “This is particularly apparent among mid-level employees, creating a dangerous ‘hollowing out’ of organisations and a critical shortage of next- generation leaders.”
The report has lots of interesting stats. For example, the bulk of those looking to leave their current role are either looking to move to a different role in finance or move to a competitor. However, a significant chunk, adding up to 28%, are either planning on taking a career break or moving to another industry.
Compensation is unsurprisingly the number one driver behind a desire to leave, but another factor, a lack of promotion opportunities, also features prominently.
In addition, softer issues, such as the team dynamic, and overall working hours, are also important factors in the discontent.
There is a cost associated with staff leaving. The report seeks to quantify the cost of losing staff and replacing them, finding that a 1% rise in voluntary employee turnover rates is costs global banks somewhere between $250 million and $500 million.
“With voluntary staff turnover now 1-2% above historical levels for a number of leading firms, some banks are incurring up to $1 billion in incremental replacement costs annually.”
The authors of the report have an impressive pedigree. Ben Quinlan, the founder of Quinlan & Associates, is the former head of strategy for Deutsche Bank’s equities business in Asia Pacific, while Yvette Kwan, a partner at the firm, was previously regional COO for UBS’s corporate client solutions business in Asia Pacific.