For those who work or have close contact with the financial world, it’s nothing new to read headlines like: "The financial world looking for work ... in any other sector" or "Bancaja Madrid to spend 1,200 million for early retirement to 4,000 employees.” For a while it’s been clear that the banking sector is witnessing its own catharsis. And in this process of purification "by force" many institutions have been obliged to begin a restructuring process that has meant the end, in a single stroke, almost half of the savings banks in Spain. More specifically, we know that institutions and labor unions have reached agreements that involve letting-go some 13,000 employees across the sector. Cleansing measures which, according to the Bank of Spain, must occur in the next three months.
Savings Banks being faced with this delicate situation, different questions come to mind: what was done wrong in the past by Banking Executives so as to reach the terminal point where they are today? What will happen to those 13,000 bank executives who have been, are, or will be soon expelled from the system? And finally, what will the future hold for professionals that remain or those who aspire to work in the banking sector?
In response to the first question, beyond the obvious "excesses" of terms and lending which we have witnessed in recent years, I think one of the key concepts that failed, in general, was not knowing how to implement and carry out an appropriate risk management. In my opinion the system did not, at that time, have people to properly strengthen this management area. A mi modo de entender, ni las generaciones más jóvenes han recibido la suficiente formación sobre “gestión de riesgos” ni tampoco desde las Direcciones de banca se ha puesto el suficiente énfasis en estas cuestiones, por la principal razón de que jamás hasta ese momento se había vivido una recesión como la actual y no parecía prioritario. From my professional perspective the younger generations hadn’t received sufficient training on "risk management" nor had banking Directors put enough emphasis on these matters, for the simple reason that in their lives they never had experienced a recession like the present one and so it did not seem a priority.
As for the "exits," according to the plan agreed upon with labor unions, the majority lay-offs will occur through early retirement of employees over 55 years, but compensated lay-offs will happen as well. Con respecto a estas últimas, la mayor parte de los empleados que saldrán de las entidades acabarán recolocados en otros sectores y una parte de ellos, alrededor del 15% montarán un negocio con las indemnizaciones recibidas. Regarding the latter, the majority of these redundant professionals will eventually relocate in other sectors and some of them, about 15%, will start their own business with the severance received. Good luck to all.
Likewise, outgoing workers who change sectors, I believe will not do so for lack opportunities. In this sense, I agree with other professionals in headhunting and outplacement in that market opportunities exist and will continue to exist. However, it will be necessary to be active to take advantage of them. On the other hand, as seems logical, the permanent changes in the system have left their mark on the candidate profile needed by financial institutions, in addition to basic skills such as languages, willingness to travel, commercial skills and having degrees in fields other than customary ones (engineers, computer scientists, mathematicians) have gained prominence.
In short, I define the purification that the financial world is experiencing as a return to basics. Savings Banks are returning to their foundations (An appeal to wisdom lost), and in this sense I believe that what happens in the future will be positive. The financial sector is currently in a previous -and necessary- step towards taking off again and grow in one direction. In other words, the financial sector is sending down roots, and my wish for the future is that these new seeds grow healthy, bloom and shine for a long time.