Gold Rush Is On as Recruiters Mine Distressed Financial Sector Workers
By the end of 2008, the Fortune 100 company will have picked up 1,500 new agents, boosting its total field force to 4,500. The company plans to hire an additional 1,500 agents in 2009, many of them recruited from the distressed sectors of the financial services industry.
"We’ve partnered with Web sites that reach people who have been laid off in financial services and we’re getting a good response," says Scott Capurso, director of net field force growth for MassMutual. "These people have transferable skills and they have contacts. Mortgage brokers, for example, have a book of business and are capable of doing a sales cycle."
Employment in the financial services industry is down by 200,000 jobs since it peaked in December 2006. By the end of 2008, the number of layoffs in financial services will top the number for 2007, which broke all records. The newly unemployed include thousands of commercial banking workers, thousands more from the mortgage and consumer lending sectors, securities analysts, accountants, customer service workers and salespeople.
An additional 50,000 employees from the real estate sector have lost their jobs in 2008, including many with strong sales and service experience. With commercial work caught in a sharp decline, law firms are also shedding highly educated professionals with broad skills.
Only pockets of the financial services industry are still hiring, and the prognosis for job openings in 2009 is bleak. The job openings rate has been in a downward spiral in all regions of the country for more than a year.
Most of the industry’s unemployed will be forced to move into other sectors, and many will be willing to retrain, relocate and accept lower pay. The legions of unemployed financial workers represent a flood of potential applicants, particularly for recruiters looking for candidates with college degrees and solid work experience.
"This is a wonderful opportunity to grab good talent," says Paul Herrerias, managing director for the financial services practice group at Stanton Chase International, an executive search firm in San Francisco. "Candidates who have been laid off from the financial services industry work hard, work smart and manage projects well. For the first time in 10 years, they are open to a conversation about leaving the sector. Now is a great time to pick up these candidates because they are devalued."
In addition to the thousands of financial industry employees who have already been laid off, many more anticipate future job cuts and are actively job-hunting. One Stanton Chase banking client reported that it is receiving five to 10 résumés a day from global investment firm employees looking for a safer place to work.
Herrerias reports that a large entertainment and hospitality company recently posted a public relations position and received 140 responses, including many from people from the financial services industry.
Herrerias notes that a good recruiter can show financial industry candidates how to use their transferable skills in other industries.
"They have excellent communication skills, project management and supervisory skills, IT experience, and sales and marketing skills," he says. "They know how to work under tight deadlines. Many of them have finance skills that can be transferred into any industry."
Although the thousands of employees laid off by mortgage companies offer an attractive range of transferable skills, Herrerias notes that they may encounter the greatest difficulty in finding new jobs.
"There is a stigma surrounding candidates from the mortgage-banking sector," he says. "The market is simply flooded with these candidates and no one wants to see them. These applicants need to rewrite their résumés. They need to list their transferable skills right up top and leave their actual employment history for the second page."
Bill Ritchie, a top recruiter for MRINetwork in Indianapolis, notes that the stigma now attached to mortgage brokers is similar to the negative attitude toward year 2000 information technology professionals who found themselves unemployed and looking for work when the Y2K crash failed to materialize.
"Many of the unemployed mortgage brokers are bright, college-educated people, but whenever an industry has a bubble, there’s a backlash against its professionals. We’ve heard that employers who are hiring don’t want to see mortgage people."
Ritchie notes that other casualties from the current crisis include workers who have been laid off in the residential construction blowout.
"The commercial construction employers don’t want them," he says.
High-performing career changers
MassMutual welcomes applicants from the mortgage sector and other job seekers from distressed industries. Earlier this year, the company expanded its online career Web site to include videos of agents describing their jobs in their own words.
Many of the professionals spotlighted are career changers. In fact, MassMutual’s five top-performing agents are all career changers, and the company has launched a full-scale recruitment program that targets experienced workers from outside the insurance sector.
"We have undertaken an initiative to hire career changers because it’s necessary to grow the business," Capurso says. MassMutual expanded its field force by 8 percent in 2007 and projects 7 percent growth for 2008. Given the broad demographic shift in the workforce toward older workers, the company now finds itself pulling 70 percent of all new hires from the pool of experienced candidates, compared with 50 percent in years past.
"Many of the people we contact were laid off recently," Capurso says. "They are capable of assessing client needs and have a customer relations background. They see the agent position as a stable occupation, especially relative to jobs in industries that are offshoring. The face-to-face aspect of the work lends itself to stability."
The MassMutual process for signing on an agent entails psychological assessments and multiple face-to-face interviews. The company targets unemployed financial sector candidates through direct e-mail campaigns and online ads on sites such as Monster and CareerBuilder. In the past few months, 400 applicants have responded.
"We look for a good cultural fit," Capurso says. Some candidates need time to study for the appropriate licensing, so the entire hiring process typically takes 30 to 45 days.
The company is also recruiting from the significant pool of pharmaceutical representatives who are now out of work. Pfizer, Merck and Bristol-Myers Squibb have shed thousands of employees in the past year and continue to downsize.
"All of these candidates have sales experience but see barriers in trying to move back into their business," Capurso says.
MassMutual pitches job security as one advantage of the agent position, which is a full-commission job.
The company provides a subsidy allowance paid on a monthly basis for up to three years.
"It’s basically seed money to help the agent build the business," Capurso says. "The first few years can be challenging, but particularly when agents sell certain products that pay residual incomes, the job can become quite lucrative over time."
Agents receive the same benefits as other MassMutual employees.
Base net field force retention at MassMutual in the first year is 82 percent. For the second through fourth years, retention dips to 78 percent, but for five years and beyond, retention averages an impressive 93 percent.
It’s too early to tell whether MassMutual’s new hires will perform well with minimal training.
"Our only concern is making sure that they are proactive in their approach," Capurso says. "Mortgage bankers, for example, are used to waiting for loan seekers to arrive at their office. As insurance agents, they need to network and set up appointments."
To reassure its clients, employees and potential job candidates that it is not exposed to the same forces that have brought down so many financial services companies, MassMutual carefully distinguishes itself from firms in high-risk positions.
"Because of the shake-up, we are too often lumped in with other companies in the sector," Capurso says. "Our mutual ownership contributes to our stability because we cannot be acquired. Now we have to re-educate people about why we are different from the rest of the industry."
Filling overseas positions
Recruiters faced with difficult-to-fill overseas jobs may find enthusiastic candidates among those left unemployed by the financial crisis and executives who increasingly believe that the best career opportunities lie outside the U.S.
Although Japan, South Korea and other developed Asian markets are experiencing their own rounds of financial services layoffs, reports confirm that some unemployed finance professionals are moving to emerging Asian nations where hiring is still strong.
"It makes sense that some financial services candidates would move to the developing markets," Herrerias says. "Also, the big accounting firms are looking for tax and audit people here that they can move into their offices in Shanghai and other locations."
Companies in India are snapping up managerial talent from U.S. and European financial industry subsidiaries that have downsized their Indian staffs. Beijing, Moscow and Dubai also offer attractive opportunities for finance professionals.
Pessimism about U.S. and European prospects appears in a recent Korn/Ferry International survey of executives worldwide who reported that they overwhelmingly favor job opportunities in the developing markets over the more established economies.
Almost one-fourth of the executives said they are more likely to accept an international post in an economic downturn, and 64 percent believe that Brazil, Russia, India and China offer the best career options. U.S.-based recruiters at multinational companies can now move ahead with their overseas counterparts to fill professional and managerial positions in labor markets where demand continues to outstrip supply.