Career
Development
for VP and
Director Level:
A New Paradigm
Contents
Executive summary
3
introDuCtion
6
employment trends
The War on Talent
What does this mean for Career Development?
9
11
11
The new Career Development paraDigm
Career Progression Planning
Education
Broaden your Horizons
Mentoring and Coaching
Networking, Political and Social Skills
Talent Resource Planning
Supporting Career Development
12
13
14
14
14
15
15
16
ConClusion
17
Case stuDy
20
Bibliography
21
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Executive
Summary
3
Emerging Talent can no longer expect to step
onto a predictable ‘escalator’ career path,
where performing in a role assures a rapid
ascent and amplified pay rises. Instead the
new career development paradigm requires
talented individuals to possess the agility to
develop their employability and create new
opportunities to get to the top by traversing
the career-climbing wall.1
The well-trodden career pathways of yesteryear have been
decimated, and those that have survived are no longer predictably
progressive. Today ambitious individuals must become masters
of their own destiny and organisations need to support talented
individuals by creating an environment where mobility, flexibility and
adaptability become the new norm.
4
1. Kaye, B., and Giulioni, J., W. Lose
The Career Ladder And Hit The
Wall Training and Development;
Sept 01, 2012; 66, 9; Pg. 44 – 47
The Credit Crisis, economic contraction, reputation damaging
revelations and complex regulatory environment require
organisations to reinvent and transform themselves. High capital
costs have led to business and product lines being forfeited and with
them, traditional succession-planning strategies. Shifts in operating
models with its focus on cost reduction rather than growth has
resulted in human capital budget restrictions.
“Banks are viewed as having failed the economy and country.
Banks make money through people effort but no one
communicates the human cost of that failure.”
ONS figures demonstrate that voluntary exits had already fallen by
50% prior to the economic downturn 2 leading to a contraction in
Director level positions with a 14% reduction in officer level positions.
The re-evaluation of role responsibility, removal of the Default
Retirement Age (DRA) and abatement in senior level hires have
dramatically reduced mobility, blurring the lines of responsibility
between Director level roles and leading to stagnating careers for
emerging talent at VP and Director Level.
2. CIPD, Megatrends The Trends
Shaping Work and Working Lives
London July 2013
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Organisations must proactively manage expectations regarding
traditional position and salary measures of success to avoid
disenfranchised employees. Support is needed to help individuals
embrace person-centred career development, requiring a selfconcept of career success; happiness, self-determination or
satisfaction from developing both personally and professionally.
5
Remuneration will remain a source of contention externally while
causing internal agitation with subdued salary increases. However,
organisations that offer development opportunities and rewarding
work can circumnavigate the problems created by restrictive
pay scales.
It is critical that organisations plan for the capability requirements
for tomorrow. Although headcount reduction remains a theme for
the industry as a whole, there are areas, particularly in emerging
markets such as regulatory control, compliance and risk where
the War on Talent persists. Growing demand for data analysts,
specialists in business and management intelligence and database
developers are a reflection of the pursuit of efficiencies through
technology and the struggle to manage large data sources.
Organisations should align their Talent Planning to their changing
operating models to ensure future business requirements can be
met with the necessary talent resource.
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Introduction
6
7
The environmental dynamism of the Financial
Services sector has accelerated due to
continuing globalisation, a modified and
complex regulatory framework, reduced
revenues and technological advances.
Together these have created a new
career development paradigm at both an
organisational and individual level.
“Banks need to change and adapt, and the future may be
different from how the industry currently operates but
management disciplines and references to talent required
to drive the industry forward will remain constant.”
For organisations the capability exigency has changed. Flattening
pyramid structures have impeded traditional succession planning
and difficult trading conditions have reduced voluntary attrition.
Rigorous analysis is required to effectively manage human capital
and develop a business case for investment in people.
For any sector it is desirable to have a degree of voluntary attrition
in the market, but the impact of industry wide headcount reductions
is increasing the length of service. It is not yet known whether
employment mobility will return to previously bullish levels when the
economy recovers. It is possible that the number of job transactions
will remain sluggish and the question remains as to what
ramifications such a scenario poses for recruitment, progression,
career patterns and employee engagement.
A key challenge in a difficult employment market is the maintenance
of motivation and engagement among the surviving employee
population, especially with a continuing cost focus constraining
efforts to improve employee engagement.
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What is known is the importance of protecting the employer brand
during such a turbulent period. Trust, reputation and culture are
often neglected assets as organisational priorities seek to manage
a rapidly changing business environment. Badly handled headcount
reduction coupled with laissez faire career development processes
will result in diminishing levels of trust among the workforce,
decreased job satisfaction and impact the reputation of an
organisation.
8
At an individual level, taking the initiative and responsibility over
career decisions is essential. Increased oversight from regulators
makes it unlikely that who you know, and your reputation will be
enough without the accompanying proof of performance, smart
planning and experiential personal development.
Individuals facing career stasis because of reengineering of
organisational structural design and a turbulent employment market
are discovering that the skills and experience once coveted by firms
are no longer relevant.
Fewer potential job openings and career opportunities and reduced
numbers of management and upper level positions are available for
emerging talent to progress their career upwards. The continued
focus on cost, means that many employees are cognisant not
only of the precarious nature of their current position, regardless
of how well they perform, but the risk and impact to their future
career prospects.
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Employment
Trends
9
10
In 2013 aggregate Investment Banking revenues reduced to $331bn
versus 2007 & 2009 revenues of $465bn and $473bn respectively.
With revenues hit so dramatically, so too is headcount. There has
been a healing process over the past five years, and there are
areas of growth in the banking sector employment market but the
overall picture regarding cost-to-income ratios remains flat. Despite
headcount reduction, falling revenues and rising costs elsewhere
means cost focus remain de rigueur and there is unlikely to be a
return to pre-crisis employment levels.
Managing cost base against reduced revenues remains a priority,
with efficiency and profitability remaining a key issue. A 10% year
on year reduction in investment banking revenues since 2009 is
compounded by a cost reduction of only 1% and cost-income ratios
increasing to 73% versus 52% in 2009
In the UK economy, Financial Services are better placed than other
sectors and many organisations are taking advantage of potential
market opportunities. UK and US appetite for risk is growing
alongside increased activity inside the regulatory space. We can
expect future growth as conditions in Europe improve where a
growth in jobs is predicted. However, the recession has focused
efforts on cost and reduction in regards to resourcing budgets with
emphasis on internal talent development, talent retention strategies
and redeployment rather than recruitment.3 Hiring levels have yet to
return to pre-recession levels, however, there are talent gaps.
3. CIPD, A Barometer of HR
Trends and Prospects 2013, CIPD
London 2013
Regulatory change remains a challenge for 80% of executives, a
figure explained by the revelation that only 10% of employees have
the knowledge and relevant experience required for organisations to
navigate the evolving requirements.4 It is hardly surprising therefore,
that growth in employment levels within Regulatory and Risk control
functions has seen headcount costs increase whilst rationalisation of
Sales and Front Office headcount continues with a reduction in nonofficer positions since 2011.
4. CIPD, A Barometer of HR
Trends and Prospects 2013, CIPD
London 2013
Compensation trends will be closely aligned with top-line results
and the universal bank model may revisit the delta between
individual and franchise value propositions. Pay levels in equities
have continued to decline as margins have been squeezed but
pressure on pay levels will be greater at more senior grades due to
cost cutting.
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The War on Talent
There continues to be an employment paradox, where despite
relatively high unemployment level, the research5 suggests that the
War on Talent persists. The loss of top performers to competitors
remains a concern for 67% of UK executives.6 The speed of change in
the regulatory environment has also created an imbalance between
the skills organisations require and well-qualified individuals in the
labour market to fill the posts available. Organisations are looking
for employees to develop a diversified skill-set.
11
5 & 6. Hays and CIPD Resourcing
and Talent Planning Annual Survey
Report 2013 CIPD, London 2013
Despite the difficult trading climate, organisations must remain
proactive in aligning their future resourcing and talent management
requirements to business strategy. With continuing cost pressures
exemplary recruitment and selection practices will be required to
attract the skills and experience organisations require now, and in
the future.
What does this mean for Career
Development?
As traditional routes for career progression are replaced by
competition for new skills and knowledge requirements, it is clear
that the changes in the external environment is having a profound
effect on the shape of career prospects within and between
organisations. The traditional focus on specialisation has restricted
mobility into areas of employment growth where organisations are
finding that the availability of the required skills sets is attenuated.
Individuals who have achieved notable success believe their career
progression is a result of the contribution they make to the business
and their capability. Relevancy and the opportunity to develop
transferable and generalist skill sets will be the key to satisfying
the many professionals who cite a lack of career progression as the
factor most likely to cause them to move jobs.
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The New Career
Development
Paradigm
12
Most Finance professionals would consider that the frequency of
change in a job is an important factor, with many citing a period
of three to four years between moves as acceptable. However, a
notable casualty of organisational downsizing is an individuals’ belief
in their control over their own destiny resulting in a decision to take
a career sojourn. This ‘wait and see’ strategy is not necessarily a safe
option, and all to often individuals realise their career has stalled.
Worse still, the ‘temporary’ halt could turn into career suicide, if the
team or bank ceases to be open for business; especially if it is only
after an individual is handed their notice they examine whether their
current capability is externally relevant.
The modern environment is simply too complex for narrow casting.
Functional and product diversity is essential if an individual has
ambitions to progress to Senior Management level. In a globalised
market developing cultural awareness with overseas experience is
fundamental. A broad understanding of business and product lines
is valuable. Given the scandals of recent years, legal experience
would be useful and as the economy recovers the shift away from
cost reduction would be aided by marketing experience.7
13
7. Martin, J. The Global CEO, Chief
Executive; Jan/Feb 2004; 195;
Pg. 24
In a rapidly changing landscape, the traditional intersections of
an individual’s personal development: work experience, education
and training, are no longer sufficient to guarantee longevity of
career success and upward progression. Relevancy is borne out the
unerring commitment to personal growth, curiosity pertaining to
the wider organisational context, a desire to learn and the pursuit
of self-improvement.
Career Progression Planning
Career development planning must be more flexible, more strategic
and designed to make an individual more visible than ever before.
Skill and performance in your current position alone will not be
enough to get ahead of those competing for the limited openings
further up the hierarchical pyramid and the achievement of the
desired career success.8
The new career development paradigm requires individuals to
develop a high level of careerism; that is boldly enacting the concept
of the ‘boundary-less career’ as a career strategy. Individuals
must embrace a worldly approach to development opportunities,
coupled with a preference for a frequent change of organisations,
to get ahead.
8. Morgan, M. Career Building
Strategies. Strategic Finance: Jun
2002; Vol. 83, Issue 12 Pg. 38–43
For organisations, a holistic approach to talent resourcing and
succession planning conjugated with a broader interpretation of
talent and development accomplishments is needed to develop
greater levels of mobility laterally as well as hierarchically.
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Education
Prior to 2008, the funding of an MBA was less problematic, but
today it is essential that individuals wishing to have access to
qualifications accept responsibility for building a business case for
formal studies to be supported by the organisation.
14
Broaden your Horizons
In the new paradigm individuals must develop a new mind-set
focused on amassing a rounded skill set, a relevant knowledge
base and work experience in areas where the organisation
faces challenges if they are to progress their career. Very often
individuals will get bogged down in a narrow technical post and
forget to pursue wider business responsibilities. Seeking additional
operational responsibility, and challenging work projects in
conjunction with in-role duties will provide individuals with the
opportunity to become more sensitive to wider business needs.
“Most large companies are a collection of silos, with employees
so focused on their area of specialisation they may be missing
key opportunities and threats” CIPD
Mentoring and Coaching
Of all the career progression tactics researched, two tactics were
most prevalent as being crucial to traversing the new career
paradigm; Mentoring and Coaching.
Mentoring involves a on going relationship with a respected
individual higher up the hierarchical pyramid, developing a better
understanding of the nuances of the organisation in regards to
culture, behaviours and work standards required to progress.
A Mentor can provide support for handling specific situations,
a valuable evaluation of an individual’s professional and personal
career goals and the steps required to reach them.
A relationship with a person of influence can provide additional
career boosting benefits. Mentors who are positioned further up
the hierarchy will have enhanced clarity regarding the strategic
direction in which the organisation is progressing. Furthermore they
will have greater visibility of areas of growth in the organisation and
what positions are opening up. A Mentors’ personal network can
be invaluable in facilitating lateral moves and ensuring that there is
visibility of emerging talent to an expanded audience.
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The use of a professional coach can help provide a self-development
perspective, providing extremely valuable insight and counsel
to individuals to release potential by ensuring they leverage
their strengths and avoid derailing their career by eliminating
unfavourable behaviours and thinking.
Networking, Political and Social Skills
In a downsized and dynamic organisational environment the
use of political and social skills, and building a powerful network
of influencers to aid recognition and advocacy in the business
environment, can accelerate career attainment.9
9. Taylor, L. J., A Study of the
Relationship of three social
activities and an individual’s
Extrinsic Career Success, Capella
University, ProQuest Information
and Learning Company, 2008
“Networking is arguably the single most valuable and least
understood career management resource” Harvard Business School
From an organisational perspective the benefits of individuals
networking cannot be underestimated. Aiding the break down of
functional and departmental silos, cross-regional and cross-business
networks lubricate organisational endeavour, driving efficiency and
increasing the sharing of best practice.
Talent Resource Planning
Engagement begins with empowering employees to understand
how their work contributes to the organisations strategy. Alignment
with purpose enables individuals to appreciate what skills they
need to develop, where innovation is needed and provide positive
linkages with growth initiatives.
Although voluntary attrition falls during times of recession,
organisations must focus their limited resources to manage
expectations regarding career development, progression and
compensation.
Assuming expectations regarding job content, training, career
development, and financial rewards have disappeared or are no
longer valued by a workforce who are ‘grateful to have a job’ is
perilous.10
10. De Hauw, S. and De Vos, A.,
Millennials’ Career Perspective
And Psychological Contract
Expectations: Does The Recession
Lead To Lowered Expectations?
Journal of Business Psychology,
Springer Science and Business
Media, 2010
“Cesspool Syndrome – The most competent employees
may quit voluntarily, leaving behind more inefficient and
incompetent colleagues who will hasten the demise of the
organisation.”
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16
Long term financial and productivity costs can be supported by
developing a strategy of Labour Hoarding using cost reduction
measures, for example; salary cuts; wage freezes; the introduction of
reduced or flexible work hours; reassignment; in-house consultancy
teams; or sabbaticals.
Developing a flexible ‘project based’ approach to work assignments
can help reduce dependency on external consultants in evolving
business critical areas whilst developing internal capability by
allowing Emerging Talent to shadow interims and consultants.
Supporting Career Development
The new career paradigm may place more emphasis on individuals
proactively managing their career development but the organisation
still has a role in shaping future careers. Organisations must be
mindful of legacy, using development as a retention and reward
mechanism11 and maintaining the talent pipeline in line with business
strategy enabling the organisation to emerge for the downturn in a
stronger position.
11. Wickramasinghe, V., and
Perera, G. HRM Practices During
The Global Recession (2008 –
2010) Strategic Outsourcing: An
International Journal Vol. 5 No. 3,
2012, pp. 188-212
“Banks can only grow their revenue if they develop people.
Their competitive edge in the future will depend on
attracting good talent.”
Internal talent capability will develop into potential only if provided
with the proper conditions for growth, providing the organisation
with the ability to channel resources flexibly as organisational
challenges arise which in turn enables the seamless deployment of
employees onto business critical projects.
“Development opportunities should be provided based
on those most suited to the work. Positions on a project
team should be offered on an equal and fair basis, not just
allocated to the same people in overstaffed areas.”
Creating internal mobility options and a multi-faceted learning
environment will support the ‘climbing wall’ career paradigm.
Organisations need to offer varied development opportunities and
enable individuals to easily diversify into other areas in order to
progress their career avoiding restrictions caused by the changing
internal and external landscape.
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Conclusion
17
Organisations need to be strategic when
planning cost reduction. How headcount
is reduced, what talent to retain and what
capabilities need to be recruited must be
aligned with business strategy. Furthermore
organisations cannot assume that the talent
they require will be available when revenues
improve.12
As the wider business environment has changed, individuals and
organisations are grappling with the changing capabilities required
to achieve career success and compete in the marketplace.
18
12. Marquez, J. Recession:
Handle With Care Workforce
Management, April 7, 2008,
Pg. 16–22
It is no longer effective for organisations to provide a regimented
process of development reliant on progressing individuals within
the confines of a career silo from VP to Director level. Individuals in
these roles must reinvent themselves, and diversify their capability
to remain relevant and avoid stagnation.
Individuals need support in developing career development
strategies whilst taking responsibility for ensuring that their
capabilities remain relevant focusing on a flexible and adaptable
approach to traversing the career-climbing wall.
As the industry reorients itself for an as yet unknown future, the
need to remain relevant is as pertinent to organisations as it is
to individuals. What is clear is that tall, multilayer, functionally
organised structures are being consigned to history, and with it
traditional career concepts. Failing to evolve career development in
line with the new paradigm risks a progressive destabilisation of the
relationship between employees and organisations.
In a dynamic and rapidly changing marketplace there is a choice
to be made. Batten down the hatches and wait for the change
to happen, hoping that you survive, or choose to take charge of
your future.
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“Essential
to success
and the
maintenance
of employee
engagement
is for
organisations
to proactively
manage career
development
expectations
regarding
position and
salary.”
20
Case Study Candidate A
The Situation
Candidate A had worked for nearly two decades within Product
Control Middle Office roles across a number of asset classes (Rates,
FX, Equity and Credit) changing organisations regularly and making
steady progress up the career escalator.
Recognising the industry had changed and frustrated by stalled
progression, Candidate A realised that doing what you were told to
do and having decisions made for you, had made many job roles little
more than a constant reaction to the regulatory environment. Repelled
by the lack of thinking, Candidate A wanted to make improvements,
but realised in their current role they were in the wrong place to make
it happen and took active steps to progress their career.
Action
With opportunities to move upwards limited, possibly non-existent,
Candidate A recognised that a lateral move was required to find an
interesting opportunity with more scope. To make that happen they;
• Had a frank and honest conversation with their line manager about
wanting to do something positive.
• Proactively reached out to network with individuals in areas where
change was happening, meeting with leaders and seeking out a
group where they felt they could add value and have exposure to
people who would stretch their capability.
• Sold the opportunity of a lateral move by highlighting the benefits
to their current line manager.
Result
Candidate A moved from a traditional asset class Director Level role
into a Technological function involving new clients, new asset groups
and most significantly exploring a different skill set.
Whilst Candidate A has witnessed colleagues move to familiar
Asset class roles where they have ended up stuck, unable to move
up or move on, for Candidate A the future is rosy. Their new role is
interesting, rewarding and helping to broaden their experience, skill
and knowledge. There is an acknowledgement from Candidate A that
the way they work is different to how they used to work; recognising
that they are focused on working at a common goal, on a common
answer. Not only is the role personally more satisfying, but Candidate
A is adding value to their organisation in a critical area of change and
feels confident that in the next 3–5 years new opportunities will be
available to them.
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