In more than two decades on Wall Street, Shelley, a senior manager at a leading US bank, has never felt so unnerved as by the present crisis. But she is determined not to let her mask of optimism slip in front of the team of people still working for her in the wake of recent job losses.
As a young worker, she recalls watching managers’ faces closely during difficult times. Now, this financial services veteran believes her calm presence and persistent hard work will comfort her staff. During the turbulence she has tried to stay visible, supportive and upbeat, telling her staff: “It won’t be like this for ever. We’re transitioning from point A to point B.”
Privately, though, she admits the personal toll is immense. She has experienced many downturns, but fears this one is untenable for workers and leaders alike. The pressure to cut costs, increased regulatory scrutiny, a mounting workload and dwindling compensation have left her wondering whether to battle on this time, or find out what it is like “having a life”.
“There’s no gas in the tank left for me,” she sighs. “I’m on fumes.”
Shelley (not her real name) is one of about 200 fast-track employees who took part in research to be published tomorrow that throws light on life inside leading financial institutions in New York and London during this year’s turmoil.
The findings are particularly timely given that two of the banks that took part were Lehman Brothers, which this week filed for bankruptcy, and Merrill Lynch, which is being taken over by Bank of America. Other participants included Citigroup, Credit Suisse, and Goldman Sachs.
Through interviews with managing directors, vice-presidents and associates inside these institutions, the researchers – the economist Sylvia Ann Hewlett and colleagues at the Center for Work Life Policy in New York – reveal the human cost of the credit crisis and suggest measures that managers can take to sustain performance and retain talented employees.
Even before this week’s dramatic news, the research found that the number of employees who felt loyal to their company had plummeted to 53 per cent from 95 per cent a year earlier. Only 37 per cent said they trusted their employer, down from 79 per cent previously.
There may be limited sympathy for the plight of financial sector high-flyers. However, the research underlines the impact on individual health and on family members.
A banker who has lost 80 per cent of his net worth says he is grinding his teeth so much that he has cracked two molars. Another reports that: “My son says his back hurts because mine does.” One interviewee recounts how “my kids think I love my BlackBerry more than them”, while another says grimly: “I am depressed after work and my husband finds this difficult to tolerate day in and day out.”
Nearly 90 per cent report “high levels of anxiety”, up from 36 per cent a year ago. The number saying they “crash” at the end of the day has jumped to 70 per cent from 30 per cent. Just over half say the stress of their job is affecting their sex life, compared with 39 per cent a year ago. Two-thirds say they are not getting enough sleep.
The research is part of the Hidden Brain Drain Task Force, a private-sector project that aims to realise the potential of women and minorities. Subha Barry, head of global diversity and inclusion at Merrill Lynch and one of the key partners in the latest study, says the bank knew from previous research that women and minorities were disproportionately likely to leave or be poached in a downturn. Merrill was keen to find ways to preserve gains made on diversity in recent years and to keep talented staff.
“Although this research was initiated from a diversity perspective, a key lesson was that stress and uncertainty applied across the board, not only to women and people of colour,” she says.
The study, “Sustaining High Performance in Difficult Times”, pinpoints lessons for managers to keep up morale and performance. “Employees want to hear from their direct managers, in one-on-one and in group settings,” says Ms Barry. “It is important to listen to and engage teams in the discussion.”
One suggestion is a “no-spin zone”, in which team leaders are open and candid about prospects for the business. This is often not the case when companies hit trouble. A London-based Lehman employee told the FT last week: “No one knows anything about what’s going on. It’s been appalling from that point of view.”
Managers should lead by example, working flexibly, making time for themselves, scheduling staggered gym breaks so that staff can exercise but still keep projects covered, and inviting teams out for a drink or meal, the study recommends. They should arrange career development meetings to help staff to think long-term and look for opportunities in the turmoil.
In the fallout from this week’s events on Wall Street, some of these tips may ring rather hollow inside the financial community. Employers should pay heed, however. Recent research by the University of Wisconsin-Madison shows that job losses cause valued staff from among the survivors to walk out of the door. Losses involving just 1 per cent of the workforce lead, on average, to a 31 per cent increase in staff turnover.
These departures can be staunched by policies that give workers a sense that the company is behaving fairly, and by measures such as flexible schedules that increase survivors’ loyalty.
Shelley is hanging on for now, although she finds it draining to maintain a positive façade. “There’s a sick part of you that thrives on delivering for your clients, being there for your employer, being there for the firm,” she says.
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