Banking Industry Faces Talent Shortage Amid Consolidation

Strategic Insights -

The Chicago banking industry is experiencing a talent shortage, despite rapid consolidation and the prospect of layoffs, as top executives and skilled professionals are in high demand. Banks are competing aggressively to attract and retain top talent, offering premiums and bonuses to secure a rare commodity: loan officers with experience and a strong portfolio of small or middle-market clients.

Key Takeaways:

  • The banking industry's hiring squeeze defies conventional wisdom that rapid consolidation leads to massive job shortages.
  • Area financial institutions are competing fiercely to hire managers who can quickly generate business, despite an historic low unemployment rate of 3.8% and a projected drop to 3.7% in 1999.
  • Firstar Bank Illinois' plan to expand its commercial and private banking staff by 10% is being hindered by the difficulty in attracting top talent.
  • Executive-level cuts are expected at American National Bank, but employees are hesitant to jump ship despite the merger announcement, citing a wait-and-see approach.
  • Top prospects at First NBD have been bombarded by headhunters and other large area banks, but few employees have left since the merger announcement in April.
  • First NBD employees will not know the answer to questions about the new management structure until the end of July, when merger plans are slated to be completed.
  • Banc One veteran David Kundert, 55, was slotted to head investment, trust brokerage, and insurance operations, while J. Stephen Baine, 51, president of First NBD's mutual funds and brokerage operations, was left off the top roster.
  • J. Stephen Baine is one of nine executives drafting plans for running the new bank's investment group and may be reluctant to move before the merger closes on October 1.

Statistics:

  • 3.8%: the historic low unemployment rate in the Chicago area.
  • 3.7%: the projected drop in unemployment rate in 1999.
  • 1999: the year in which the unemployment rate is projected to drop.
  • 10%: Firstar Bank Illinois' plan to expand its commercial and private banking staff.
  • $28 billion: the size of the merger between First NBD and Ohio's Banc One Corp.
  • 16: the number of people on the senior executive team of the new bank.
  • 55: the age of Banc One veteran David Kundert.
  • 51: the age of J. Stephen Baine, president of First NBD's mutual funds and brokerage operations.
  • 9: the number of executives drafting plans for running the new bank's investment group.
  • 10: the million-dollar minimum investment required for a private banker.

Sources:

  • "Rising interest: Competition for veterans heats up" by an unknown author, published in an unknown source.
  • Don Clark, managing partner in the Chicago offices of Ray & Berndtson Inc., a Texas-based executive recruiter.
  • Patricia Ashley, a former First Chicago executive and president of PMO Partners, a Chicago-based executive search firm.
  • Peter Crist, president of Crist Partners, a Chicago executive recruiting firm specializing in the financial services industry.