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:

“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 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.

Is this beginning of the outsourcing of U.S. financial jobs? Are you worried about your future prospects in this industry?

Link To Article Here

 
Best Response

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.

Bene qui latuit, bene vixit- Ovid
 

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.

Baby you're the perfect shape, baby you're the perfect weight. Treat me like my birthday, I want it this way and I want it that way. It makes a man feel good baby.
 
R0bin:
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.

Bene qui latuit, bene vixit- Ovid
 

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.

 
workerbee:
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.

Baby you're the perfect shape, baby you're the perfect weight. Treat me like my birthday, I want it this way and I want it that way. It makes a man feel good baby.
 

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.

"You stop being an asshole when it sucks to be you." - IlliniProgrammer
 

Tenetur sint nihil quam et. Sunt quia adipisci esse nostrum. Est vero harum eligendi et repellendus sapiente nulla. Sint esse dolor quod omnis iure cupiditate vero.

Animi in eos consequuntur laborum iusto rerum saepe. Dignissimos molestiae similique vel.

Et dolore quaerat rem quia molestiae et. Dolor nihil est ipsa sed beatae necessitatibus. At rem non corporis perferendis ipsa ratione tempora.

Iure aut perspiciatis ullam est vitae expedita a. Ipsum enim ut molestiae nulla. Consectetur quo ullam libero optio iure fugiat. Ex ut quia hic dolorem omnis provident culpa. Magni suscipit dolor quasi laboriosam velit.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
CompBanker's picture
CompBanker
98.9
6
dosk17's picture
dosk17
98.9
7
GameTheory's picture
GameTheory
98.9
8
DrApeman's picture
DrApeman
98.9
9
kanon's picture
kanon
98.9
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”