When you operate in an industry that has extremely high earning potential, where strongest performers can bring home big bonuses and amass sizeable stockholdings, a side effect is that senior individuals tend not to stick around. A lot of our key clients in the commodities market are currently speaking to us about the challenges they are finding as a result of early retirements, and the generation gap that trend is creating within their organisations.
It is not unheard of for individuals to be retiring 20 years earlier than their employers might have expected, with some people quitting before they turn 50 to spend more time with their family. Typically, these individuals have dedicated more than 20 years to the industry, have worked hard and travelled extensively, and they are able to retire with years of high bonuses in the bank.
But at the same time, investment banking or commodity trading is no longer as attractive to graduates as it once was, and so firms are also losing out at entry level, as the strongest university leavers often opt to join tech companies and entrepreneurial start-ups instead of what might once have been the usual suspects. With this entry-level dynamic taking hold in the past decade, our industry has started to find itself looking top heavy, at a time when those senior people look like they might leave at any moment.
Some of the larger firms have attempted to address this challenge with the introduction of their own graduate schemes, emulating the investment banks in a bid to build a pipeline of talent. The likes of BP, Shell and Trafigura are leading these efforts, with many more trading houses beginning to pursue the same route as a means to ensure that, moving forward, generation gaps are not an issue.
The problem at the moment is particularly acute in the mid- to senior-level experience grades, meaning individuals of about 5-7 years post-qualification experience are being built up much quicker than they might otherwise have been. Businesses across the industry are being forced to focus on making sure they are really developing individuals and elevating them so that they are ready to take the reins when the more senior talent opts for retirement, and that leaves a gap in their stead. We are witnessing a lot more focus on succession planning, which has become a hot topic in the recruitment market with many firms paying closer attention than ever before to their pipeline of talent.
by Stuart MacSweenview my profile