It only took me one coffee date to appreciate the nerve-racking struggle Bay Street stalwarts are starting to face.
On Friday, a junior investment banker who is fascinated with the way Silicon Valley has taken aim at financial services asked for some career advice. After reading a recent feature on the massive threat posed by these so-called "fintech" startups, the Queen's Commerce grad is wondering if joining one would make for a smart next step.
The cardinal rule used to be that junior bankers would grind it out for a few years, then do an MBA as a vacation of sorts. After graduation, they'd either head back to banking or use their pedigree to land a job in private equity or maybe at a top asset manager. Most people wanted to work for a select group of top-tier shops.
Some graduates still adhere to that playbook. But Friday's meeting made it clear that a new crop of Bay Street's bright minds are evaluating more options. Because top talent has more places to go, it's going to be much harder for firms to retain their best young employees.
The knee-jerk reaction for employers is to assume startups are appealing solely because they offer the chance to get rich relatively quickly. While that's certainly an appealing reason to join one, any firm that uses this to justify their retention issues is going to suffer from an exodus of stars.
Historically, top graduates were ecstatic to work for a top-tier name – whether it was a law firm, a consultancy or an investment bank. They'd often endure the pain that came with these jobs – gruelling hours, politicking – in exchange for the prestige associated with these positions. The fat paycheques helped, too.
There's been a cultural shift.
The next generation of bright minds possesses different values than their veteran colleagues. But most firms aren't showing the desire to evolve.
Within many big, bureaucratic Bay Street institutions, it can take years to earn the right to speak at meetings where top managers are present – even if you're the junior who put the entire presentation together. Younger employees are also more likely to want quality feedback throughout the year to make them feel as if they're building something, rather than relying on the amount of their annual bonus to dictate just how much their firm values them.
At startups, no one is thought to be too young to change the world.
Then there are the perks. At Google and Facebook, in-house chefs cook fancy lunches every day and team meetings in Austin, Tex., aren't unthinkable. On Bay Street these days, there are no more off-site trips to Banff for the junior ranks, and there are fewer nights out where a managing director tells the new hires to go party and expense the bottles.
The industries in which the best and brightest business and law school graduates traditionally look for jobs – consulting, capital markets, corporate law, accounting – could be the most exposed to a Silicon Valley-fuelled exodus, but the behemoth personal and commercial banking arms of Canadian banks are also under siege. These divisions, where employees joke about having meetings to schedule the next meeting, can stifle youthful creativity.
Privately, Bay Street executives admit they are scared. The rulebook is being rewritten almost daily.
For those who need some help adapting, there's one major change that must be made: Empower your young stars. Take them to clients meetings; call on on them to voice their opinions; and, please, for their sake, scrap the ridiculous pitchbooks and presentations because your clients have seen all the same slides from your competitors.
It might seem as though this is a whole lot of hoopla about nothing – especially because it is difficult to find hard stats that back this up. And historically, junior employees have moved on – often to clients with whom they've worked while on Bay Street.
But I can promise you there is something deeper this time around and the old way of doing business isn't going to cut it. There are some brilliant young minds hidden within your organizations. If you don't tap them, some startup will.