Hire Wire Aug 18 2011

Mid-Career Workers Squeezed Off the Street

By kyle stock

When it comes to firing, Wall Street no longer sticks to a last-in, first-out system. It doesn't go with first-in, first-out either.

Rather, since investment banks and brokerages started shrinking in 2008, middle-aged, mid-career workers have borne an inordinate share of layoffs and cuts by attrition, according to federal data, recruiters and economists.

"They're expensive and relatively expendable," said Dan Ryan, a partner in charge of the banking practice at executive recruiter Heidrick & Struggles in New York.

From the second quarter of 2008 to the second quarter of 2011, almost half of workers aged 35 to 54 at U.S. investment banks and brokerages vanished, some 113,000 individuals, according to a FINS.com analysis of data provided by the Bureau of Labor Statistics.

In that time, the ranks of employees aged 20 to 34 fell by 39% with 62,000 jobs lost. Meanwhile, the number of bankers aged 55 and over grew by 18%.

Ryan, at Heidrick & Struggles, said banks have held onto their oldest, most senior workers for their client relationships and knowledge of economic cycles. And firms have been less aggressive in cutting young, junior employees because they work particularly hard and are relatively cheap. Middle-aged workers are stuck in a vulnerable spot in between, Ryan said.

A similar, though less drastic, dynamic has played out in the general economy. In the past three years, about 5 million people between the ages of 35 and 54, some 7.3%, disappeared from the workforce. Meanwhile, the ranks of 20 to 34-year-old employees fell by 4.1% and the number of workers aged 55 and over grew by 2.1 million, or 7.9%.

Mark Zandi, chief economist at Moody's Analytics, said reeling markets have pressured older workers in all industries to stay on the job longer. Finance companies, however, have had to aggressively cut costs as deal volume and trading revenue remained below pre-recession levels.

"They're not pruning here, they're lobbing off," Zandi said. " And they're not worried about productivity. They are going to be looking at 'What is this person costing me?'"

Glocap Search LLC, a New York-based search firm that specializes placing finance professionals, has recently been inundated with resumes from laid-off workers with eight to 10 years of experience, according to recruiter Valerie Valtz Edis, a senior vice president.

"Sometimes firms just need to make the math work," she said. "They can get rid of one mid-level hire as opposed to getting rid of five or three more junior people."

At the same time, Glocap clients are asking to see young candidates with two to six years of experience. Many hedge funds are reluctant to hire mid-career workers, because they have grown used to a different system of valuing investments and making decisions, Edis said. They prefer to train promising young workers from scratch.

Federal age discrimination laws protect workers over the age of 40, but it can be difficult for a middle-aged claimant to win without a record of layoffs showing a clear trend, said Robert Benowitz, a labor lawyer and partner with New York-based Rick Steiner Fell & Benowitz LLP. And jurors have become somewhat calloused to claims from affluent bankers.

"In today's environment, with so many unemployed or underemployed, their sympathy may not necessarily be with someone who is seeking a severance of half a million dollars or more," Benowitz said.

New York City career coach Roy Cohen has advised a tide of workers set adrift between the associate and managing director levels. In many cases, they had grown complacent in their elevated status, neglecting to close business aggressively or stay up on technology.

Cohen often advises such professionals to look for work at less prestigious firms or with former business contacts in peripheral industries.

"It's not that folks who are older can't transition to another job or another industry," he said. "It's just that it's much easier to explain a break -- to tell a story -- with a younger worker. The market right now has no tolerance for anything less than perfection."

Write to Kyle Stock at Kyle.Stock@dowjones.com




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