But Goldman doesn’t just rely on paying out big salaries and bonuses to recruit, retain and motivate its employees.
"Money is nice, but people want to feel like they are being challenged and that they are learning," says Carol Pledger, managing director of Goldman Sachs University. "And Goldman Sachs won’t be successful if we don’t keep innovating and growing—and to do that, you need people to think outside the box."
That’s why Goldman has made learning and development a core part of the company’s culture. Many companies keep training and development as a side dish to their business, but over the past few years, Goldman has made its Goldman Sachs University a core part of its operations, embedding trainers within many of its divisions.
The company has an advisory board of 32 senior people whose job is to monitor the business challenges Goldman confronts and figure out how they can be resolved through training, Pledger says. Last year alone, Goldman Sachs University introduced 26 training programs.
The effort seems to be paying off. Fiscal 2006 was a record year for Goldman, with net revenue of $37.67 billion and net earnings of $9.54 billion. For this year’s first quarter, Goldman’s net revenue rose 22 percent from a year earlier, to $12.73 billion.
Goldman Sachs wins the 2007 Optimas Award for General Excellence for its commitment to training and developing its people to stay ahead in the fast-moving, cutthroat world of financial services.
The company is recognized in seven Optimas categories: Competitive Advantage, Managing Change, Financial Impact, Global Outlook, Innovation, Partnership and Service. Here are some of the highlights:
Competitive Advantage: Being the first to market with a new and unique product is the goal in financial services, because in no time there will be dozens more products like it. That’s why in 2000, executives in Goldman’s securities division created a suite of highly complex, high- margin derivative products. But to make sure they sold well, Goldman Sachs University introduced a global advanced training program for its traders, sales force and clients. To date, 2,000 employees and 2,000 clients have taken the courses, and revenue from derivatives has grown steadily during the past seven years.
Managing Change: As equities nose-dived at the beginning of the decade, Goldman saw an opportunity to expand into debt instruments and other types of securities. The company decided to reorganize its securities divisions to enable its traders and salespeople to trade and sell all products. This would require taking them out of the silos they were accustomed to and training them on a variety of new products. In late 2000, Goldman brought out its training program, which entailed a mix of e-learning and instructor-led courses for new hires and existing employees worldwide.
Global Outlook: Goldman set its sights on seizing the growth opportunities in emerging markets like Brazil, Russia, India and China early on. But the company realized that there were significant cultural and educational challenges involved in establishing offices in these regions. To address these obstacles, Goldman Sachs University unveiled extensive cultural programs for local employees to understand the Goldman culture; financial products training to employees, regulators and key clients; and language and communications skills training.
Innovation: In 2001, Goldman started seeing a reverse in its hiring trend. Instead of hiring mostly campus recruits, the company had started increasing its number of experienced hires to keep up with the firm’s growth. Goldman realized that it can be difficult for experienced hires, particularly new managers, to integrate into a new culture. In late 2004, the company introduced a series of initiatives that included a new orientation program, a mentoring program and networking opportunities for new managers to get to know their employees. Eighty-six percent of experienced hires say the programs have helped them better understand Goldman’s culture, expectations and strategy.
Partnership: Goldman understands that good managers foster productive and happy employees. That’s why in 2004, Goldman Sachs University—along with the firm’s internal communications, global leadership and diversity teams—launched a portal for the managers within the operations, technology, finance and services division. The firm had previously offered courses to these managers, but it realized that a one-size-fits-all approach wouldn’t work. The portal provides managers with tips on HR practices like assimilating new hires, messages from the division leaders and online communities where managers can collaborate on issues.
Service: Like many financial services companies, Goldman Sachs has struggled with building a pipeline of women for leadership positions. Goldman Sachs University, working in partnership with the global leadership and diversity teams, created the Women’s Career Strategies Initiative for high-performing female associates. The six-month program gives participants a number of skill-building, career development and networking opportunities. Ninety-five percent of the 2005 participants are still with the firm, and 84 percent of those eligible have been promoted to vice president.
Financial Impact: In 2001, private wealth management became all the rage as financial institutions sought to create a steady stream of fee-based income instead of solely relying on volatile trading and banking. That year, Goldman set a goal of doubling how much its private wealth management business was contributing to the firm’s financial results. To achieve this goal, Goldman Sachs University designed a six-month training program for new investment professionals who needed to learn the business. Training included simulation drills, office rotations and group projects in which new investment professionals learned to prospect potential clients.
Goldman also created a one-day advanced sales clinic for experienced investment professionals to help them improve their skills. Since the program launched in 2001, the percentage of new investment professionals who became self-sustaining within 12 months has increased each year. Ninety-seven percent of participants say the programs have helped them become more effective in their jobs.
Headquarted in New York, Goldman Sachs has 22,425 employees in major financial centers around the world, including Tokyo, Hong Kong, London and Frankfurt, Germany. Founded in 1869 by Marcus Goldman and Sam Sachs, Goldman Sachs started out as a commercial paper broker—a dealer of shorter-term corporate debt—in lower Manhattan. Last year, the company posted revenue of $37.67 billion and net earnings of $9.54 billion
Goldman Sachs is a global investment bank and securities and investment management firm. It serves various types of clients, including corporations, financial institutions, governments and high-net-worth individuals. The company went public in 1999.
Workforce Management, March 26, 2007, p. 22-23 -- Subscribe Now!