Financial Job Bank: Help Wanted Bankers
In December, President Trump signed into law the largest tax reform legislation since the Reagan Administration. While the across-the-board tax cuts will help both individuals and corporations, we focus on the corporate side in this article and learn more about the financial job bank. Check out our job bank for financial career openings in your area.
How the New Tax Rate is Helping to Accelerate Hiring
Specifically, the tax rate for the vast majority of corporations was cut from 35% to 21%, freeing up billions of dollars in resources for Corporate America.1 Several companies have announced plans to use their tax savings for various capital expenditures including employee raises, increased lending for small businesses, debt repayment, campus construction and new hiring. Blue chips AT&T, Disney and Apple kicked off 2018 with very public bonus announcements for existing employees.
Banks are Hiring
At Financial Career Options, we focus on new job opportunities at banks and other financial firms. And the hiring outlook for 2018 appears bright and could accelerate following the tax bill’s passage. Case in point, a survey of CEOs conducted by Business Roundtable revealed that 43% plan to “ramp up hiring in the next 6 months.”2
JP Morgan Chase has begun the hiring spree with a plan to add 4,000 new employees to their existing quarter million-strong global workforce. Concurrently, the New York City-based money center announced plans for 400 new Chase branches, to be staffed by roughly 3,000 of the new hires.3 The bank intends to enter new markets, so branches are likely to open up in the Northeast, notably Boston, Washington D.C. and Philadelphia.
Small Business Benefits
In addition to the new hires, JP Morgan has pledged to lend an additional $20 billion to American small businesses. This is a welcome announcement since many of these businesses, especially startups, are often shunned by traditional lenders when seeking financing.
Cash flow is the lifeblood of most small businesses. When economic conditions recess, access to essential credit becomes very difficult. Many businesses are forced to turn to expensive financing alternatives including business cash advances, asset-based lending or accounts receivable factoring. Small business lending is a very profitable area for banks due to small business reliance on credit without access since to cheaper capital markets that large companies are privy to.
Who Is Hiring
Wells Fargo might be next on the hiring front. They already announced one-time bonuses for employees and since they compete with JP Morgan for many of the same customers, Wells will not want to concede market share.
Considering Wells Fargo also reaped outsized savings from the new tax cuts, with an average effective rate that will drop from 31.5% all the way down to 19%, they will certainly have extra financial resources to put towards new hires.4
What Positions Will Be Created?
In addition to administrative staff, we expect banks like JP Morgan to seek out relationship bankers, loan officers, and bank managers to oversee branch operations.
These professionals, also known as business bankers or relationship managers, provide small and medium-sized businesses the financing and ancillary services necessary to operate effectively. These include SBA loans, revolving credit facilities, payment processing and cash management products. As the name implies, relationship bankers are in frequent contact with existing business customers as well as actively soliciting new business. And with the proliferation of online businesses, relationship bankers have recently experienced little trouble finding clients.
According to current and former employee reports on Glassdoor, relationship bankers at JP Morgan report an average base salary of $77,891, which increases to over $102,000 per year in total compensation with bonuses and stock options, etc.5
When individuals go to a bank for a loan (mortgage, auto, home equity, etc.) they are at the mercy of the loan officer. These professionals assess the risk that this particular borrower poses to the bank. Using a number of different metrics including FICO scores, salary information, and their own professional judgment, they help decide if the bank will extend credit and at what interest rate.
Loan officers are on the front line of risk management for the bank, especially if the loans are kept on the bank’s own books. Even if the loans are eventually sold off for asset-backed securities, they must be able to defend their lending rationale against compliance and regulatory scrutiny.
Such an important job is well compensated by banks. While the median salary is just $63,650, top performers can earn more than double that amount.6 In Washington D.C., (a presumed JP Morgan Chase target area) loan officers enjoy average $88,360 in compensation.7 Of course, many of these professionals have either an advanced business degree or are pursuing the CFA designation.
Overseeing all of this is the bank manager whose leadership and managerial skills is essential for the branch’s profitability. Bank manager responsibilities include hiring decisions, strategic planning, ensuring compliance and oversight of all branch operations.
As you can see, these professionals are given a high degree of responsibility and pressure to meet certain goals. Consequently, bank managers enjoy a median compensation of $137,220 according to the Bureau of Labor Statistics. In Washington D.C., bank managers average $134,800, roughly in line with this average.8
Online Masters in Finance Degree
Some wonder where the qualified candidates will merge from for all this potential hiring. While its almost impossible to have predicted during the financial crisis (with unemployment around 10%) that unemployment would get to just above 4% and there would be difficulty finding qualified candidates in such a tight labor environment. Yet, that is where we are today.
The best way to land one of these higher-paying management positions is with a graduate business degree such as an online MBA in Finance or online Masters in Finance degree. In these programs, you will learn the core skills necessary to operate in a bank setting including accounting, risk management, personal finance, credit and lending, capital markets and financial reporting.
The group projects within MBA programs are viewed as an invaluable skill among employers. It teaches the softer skills that cannot be learned through number crunching alone. Finally, a program-ending Capstone project often lends itself to real-world scenarios where students consult with local businesses.
Some accelerated Masters programs can be completed in about a year, so it’s a great time to take that next step to advance your career. Why not move to the front of the line for these new banking positions?
Pursue an online Master’s in Finance degree today.