Five years after the financial crisis, small and midsize banks in Charlotte say they are having a hard time filling core positions – in part because graduating finance majors are more leery of going to work in traditional banking jobs.
These bankers say it has been tough to find experienced commercial lenders and credit analysts – at the very time when they want to boost lending. Banks are already lamenting mediocre demand for loans from businesses that feel uncertain about the economy.
Banking insiders blame the talent shortage on multiple causes, including the loss of training programs at large banks, turnover within banks and the growth of other types of jobs in financial services.
College students with a general understanding of banking could help fill the void. But some students worry that the banking industry offers too little job security, a perception forged by years of negative headlines since the financial crisis, bankers and academics say.
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Daryl Kerr, associate dean for undergraduate programs at UNC Charlotte’s Belk College of Business, said business students’ No. 1 worry about working for a bank is job security.
“They see financial institutions laying off,” he said. “I hear a lot of them talking about that.”
Financial sector employment remains down in Mecklenburg County compared with before the recession, although it has been rebounding. According to the latest federal data, the sector employed 61,834 in Mecklenburg County as of March, down from the prerecession high of 67,600 in December 2006.
“Banking as an industry does feel like maybe it’s a little bit less stable, maybe it’s a little bit more dangerous,” said Joseph Hiatt, a UNC Charlotte finance major who graduates in December.
Tony Plath, a UNC Charlotte professor who teaches finance courses, said enrollment has fallen in the university’s commercial bank management course since the financial crisis. The course enrolled 91 students in 2006-07, according to the university. Last year, it was 13. This fall, it’s up to 39.
“It was down to about eight or nine students for a year or two, just because there were so few jobs,” said Plath, who teaches the course. “Banks weren’t hiring.”
Bank of America and Wells Fargo, which together employ more than 35,000 in the Charlotte region, say there’s strong interest among students for banking careers.
But Richard Hunt, president of the Consumer Bankers Association, a Washington-based trade association that lobbies on behalf of banks, said it’s harder to channel students into the industry compared with before the meltdown.
A “great amount” of students continue to go into banking, “even in this difficult environment,” he said. The financial crisis, coupled with “politicians in Washington sometimes demonizing banks,” have complicated efforts to get more students to work for the industry, he said.
“We have more of a challenge recruiting people from universities,” he said.
UNC Charlotte business student Lindsay Kosma is among those opting not to work for a bank. She worries about job security.
“You’re expendable. You’re a number,” said Kosma, who graduates in December. Instead of a bank, she has taken a job with a payroll and benefits administrator in Winston-Salem.
The reluctance of students is potentially bad news for banks that want to groom interns who can be moved into positions that become open when more experienced bankers leave or move up within the company.
John Hipp, CEO of Charlotte-based New Dominion Bank, said banks are turning to one another for help in finding job candidates.
“This is honest to God the truth: I have another community banker here in town wanting us to send them the names of anybody that we didn’t hire, because they couldn’t find or source commercial bankers,” Hipp said.
The number of commercial lenders is declining as they retire, while others have switched jobs to make more money in a highly competitive hiring environment, he said. It all adds up to a shortage of “high-quality” commercial lenders who have deep business relationships within the community, he said.
University steps in
Queens University of Charlotte has sensed opportunity amid the hiring woes of small banks.
The school is launching an undergraduate banking program to prepare students for jobs in the industry and provide them with internships. The three-course program is designed to especially help small and midsize banks, university officials said.
In September, Queens hired a former Bank of America executive, Tracy Grooms, to head the program. Classes begin in the spring.
Grooms said turnover is rising in the banking industry, creating job openings at banks. “In the last 18 to 24 months, it’s coming again,” she said. “So, there’s been more active recruiting.”
One trend driving the turnover: More types of jobs in the financial services industry.
“Players that are not really a bank are starting to offer banking products,” she said. “I will tell you, lots of bankers have gone to PayPal. The competition is not just among banks. So you’ve got more competitors competing for the same talent.”
Queens wants to provide banking fundamentals to students at a time when banking insiders say another system for teaching the basics – management-training programs – has also been shrinking. When those programs existed at bigger banks, smaller banks could use them as a source of talent, hiring away trainees.
“That’s a big void now,” said Wesley Sturges, president of Charlotte-based Bank of Commerce, a community bank. Sturges said those programs disappeared about 10 years ago because of so many trainees being picked up by other banks.
“As a result, what we’re needing to do is either bring some more experienced bankers on board who are wanting to make a change, or train our own,” he said.
But even if more students pursue banking, some wonder whether small banks will be able to attract them – especially if they worry about job security. That’s because some small banks are still struggling to be profitable, leading many in the industry to predict more acquisitions.
“I think a lot of people are worried about what the future of banking, particularly if you’re at a small bank ... may be for you,” said R. Patterson Jackson, CEO of Newport Beach, Calif.-based Sabal Financial Group, which has a Charlotte office that lends to homebuilders.
‘It’s not going away’
Retired Bank of America CEO Hugh McColl Jr., for whom Queens’ business school is named, said the university’s banking program fills an important need for small banks.
McColl acknowledges that the banking industry’s image has been damaged in the financial crisis and it faces tougher regulations. But the industry will recover and generate plenty of jobs, he said – jobs he hopes Queens students land.
“They may be run differently, and certainly the delivery systems will be different because of the Internet. That being said, there will be plenty of jobs,” McColl said.
“The banking business has been with us forever – for centuries – going back to biblical times. And it’s not going away.”
Reach Roberts at (704) 358-5248