New York City officials disagree.
Despite the large salaries and bonuses, city officials recognize that if these workers—many of whom have lost their jobs—leave the region, the city could be devastated.
A recent study by the New York City Economic Development Corp. found that the 340,000 financial services jobs in New York make up 40 percent of the region’s payroll.
“We are the financial services capital of the United States,” says David Lombino, a spokesman for the New York EDC. “We knew that we had to figure out a way to take these extremely talented and educated workers and make sure they can do something else here.”
In February, New York Mayor Michael Bloomberg announced 11 initiatives to address this problem. Among these programs are retraining courses to help displaced financial services workers set up their own businesses.
For years, retraining programs have been gaining traction among blue-collar workers as more U.S. manufacturing plants shut down, but New York’s effort demonstrates that these initiatives are becoming just as important for professional services fields, experts say.
“It’s not just the blue-collar workers now that are seeing their jobs go away,” says Peter Cappelli, management professor at the University of Pennsylvania’s Wharton School. “Even white-collar, professional workers need to be retooled.”
Under Bloomberg’s plan, New York is offering two retraining courses. The first, called FastTrac, is a six-session crash course designed to help emerging entrepreneurs set up their own businesses, says David Margalit, deputy commissioner of New York’s Department of Small Business Services, which is offering the course through a partnership with the Kaufman Foundation, a philanthropic organization dedicated to entrepreneurship.
About half of the 28 participants in the first class, which started March 23, are from the financial services sector.
The city expects 1,000 people to take advantage of the programs over the next year, Margalit says. The city is investing $500,000 in the program.
The second retraining course, called JumpStart, starts April 13 and is a job training and placement pilot program designed specifically to help laid-off financial services workers find opportunities within New York’s venture capital portfolio business.
The program, which is being run by the New York EDC and the State University of New York’s Levin Institute, consists of a five-day entrepreneurial course followed by a 10-week internship program whereby participants are placed at private-sector companies.
About 25 participants have registered for the course and 60 companies have expressed interest in the program, says Thomas Moebus, vice president of development for the Levin Institute.
Many of the employers that have expressed interest are small companies without the funds to hire highly trained people with financial skills, he says. The city expects to invest $4 million during the next five years.
Alan Johnson, a New York-based compensation consultant who specializes in financial services, welcomes the retraining program, noting that investment bankers in particular can be great employees if they are retrained.
“I always tell clients that investment bankers are not very good employees in their first jobs after they leave Wall Street because they tend to be hyper-aggressive and self-absorbed,” he says. “But they are fabulous hires if it’s their second job because they are very smart and hardworking.”
For the city, it makes sense to help these people establish themselves as entrepreneurs rather than try to persuade outside companies to come to the region and hire them, experts say.
In fact, the Metropolitan Development Association of Syracuse and Central New York has heard from a few employers in New York City that are considering relocating upstate, says Frank Caliva, director of talent initiatives at the MDA.
“The New York City economy isn’t going to be able to absorb this talent at a fast enough rate,” Caliva says. “It makes sense to help them create their own opportunities.”