Your Job Won't Be On Wall Street, If You Have One
Although most people on WSO shoot for Front Office jobs the majority of "Wall Street" works in the Middle Office and Back Office. These jobs are quickly moving away from Financial centers like NYC and London, and other cities and states are offering incentives (like ca$h) to get them there. This is called "near-shoring," the movement of jobs away from a major center to a location in the same region for cheaper costs. But movement of finance jobs offshore is happening also:
financial sector is not limited to New York. The president of Goldman Sachs described what he called the firm’s “high-value location strategy.” By looking outside hubs like New York, London, Tokyo and Hong Kong, he said, the firm could save 40 percent to 75 percent on job-related expenses.“Places like New York or London will remain financial centers, but most of the players are taking a much harder look and asking whether they can move large numbers of jobs." The erosion of middle-tier jobs in the
Is this beginning of the outsourcing of U.S. financial jobs? Are you worried about your future prospects in this industry?
Your definition of outsourcing is way too broad. This is cost control. This is more relocation of the same peple, rather than what we witnessed in manufacturing (i.e. new, low-cost, indigenous labor). So, maybe your middle office/back office role(s) has you located in Oklahoma City, but you'll be relocated- they aren't going to replace you with native Oklahomans. Because middle and back office work doesn't really require you to be in the major financial hubs, they can pay you less because the cost of living will be less outside of major population centers.
However, one thing immediately comes to mind- all of the stories I keep hearing about moving from back office to front office may have a new hurdle to overcome if you are in a satellite location.
I feel bad for all these GS kids going to Utah, what a Walter Matthau that is
Interesting times we live in, anything can happen and nobody's really safe anymore. Maybe America's previously high standards of living is declining towards a long-term mean reversion now that other countries are progressing towards a service-based economy.
R0bin- absolutely right. For much of the post-WWII era, the United States was unchallenged in terms of technological development and capital deployment. That air of superiority, coupled with the reserve currency of the world, allowed us to fall into a indigent stupor and consumption binge. Whenever the sustainability of this state of affairs was questioned, some platitude about America's prowess and natural superiority always persuaded and won the day. We now live in the aftermath of a more globalized economy. This painful period we are in, as evidenced by structural unemployment, is a return to 'normal'- a more geo-politically and economically balanced world. Of course, the United States will probably have more power than most, but it will not have the absolute hegemony enjoyed for the last 30-50 years. We are going to see many industries- finance and services, especially- see a reversion to a more normal percentage of GDP and wages in those industries will revert to a level to reflect that.
Hopefully, this wasn't gross oversimplification, but in my view, there are certain inevitable trends we must recognize and get ahead of in order to thrive in an ever-changing world.
This is me. Currently working for a BB...in Delaware.
fucking depressing
I don't think this is anything new. Haven't BBs always kept FO and BO facilities separated for the most part?
Really? Banks will relocate their trading floor from right beside the exchanges? One word - Latency. Not happening.
Seconded
Guys, its happening and its very obvious why. If you think about the last 20-30 years, there was a trend to move and stay central due to limitations in communication. This has raised the cost of living as well as the cost of wags in populated cities such as London and New York. However, with advances in technology (email, video conference) and logistics (FedEx overnight, UPS, supply chain), this puts the current model in question. Why pay a BO/MO guy $100k adjusted for living expenses in NYC when you can pay $60k in Salt Lake City, Texas, New Jersey, Altanta? You see it already with the following:
GS: Salt Lake City - Fund management/ MO/ BO DB: Coverage teams in Alanta GA & FL HSBC: Jersey offices Vanguard: Penn (however this is where they started out) Citi: Brooklyn & Jersey
Keep on going. This is not new.
Another example, call Nordstroms customer service which everyone raves about. Ask them where they are. Iowa. Thats right.
For some reason, I like this trend. Capitalism at its finest.
I sell. I have nothing to worry about.
might wanna check out my WSO blog post from last week, it was on the same subject focused on the same article. just sayin'
http://www.wallstreetoasis.com/blog/wall-street’s-exodus-to-the-regional-office
Obviously mission critical and client-facing teams will be located where they are most optmized. So traders actually making trades should be close to exchanges (I begin to question this model as quant/algo trading dominates, doesnt matter how fast a human trade is, it wont matter and will be effectively subjugated to longer dated trades). Bankers will be close to where clients, laywers and other bankers are. Why is Silicon Valley so success, because the ecosystem of programmers, investors, educators, lawyers, infrastructure, etc. fosters successful startups and ideas. However, Silicon Valley does not have a monopoly on this as evidenced by Silicon Forrest, Silicon Desert (Texas), NYC, etc.
Here is a bigger trend for you. There will be less bankers in the U.S. in the near future as a percentage of bankers globally. Asia will have more bankers as thats where the growth is. So will Latin America. Guess where US will stand? (I understand US is the most liquid and developed capital mkts of the world).
Well, there is good news in all this. Part of remaining settled in NYC/London is about prestige. Having Goldman move some offices to Iowa is like a rich Westchester family also owning a small house in Pennsylvania. They're still known for being a NYC company even though they're not entirely there. It's expected that this would be the case and I don't think we have to worry about China/India/rural America/etc.. because the odds of the financial centers of the world moving are dismal.
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