I was recently at a lunch for a group of fintech investors and entrepreneurs. The majority of the people around the table were ex-colleagues of mine from my old shop of Deutsche Bank (virtually all of them retired, voluntarily or otherwise). The question that raised the most discussion? How we would manage to hire people into Deutsche Bank if we were still there now.
Clearly, the mood music is currently not all that enticing. There have been cutbacks and redundancies and, for good order’s sake, the promise of more of the same to come. The bonus pool – though no doubt still paying people amounts of money beyond the most avaricious dreams of the general populace – is under pressure, especially compared to the bank’s rivals. And Deutsche’s stock is near its all time lows, too (which spells bad news for those employees who have been paid with chunks of stock in the past).
It’s a sharp contrast to the pitch we would give potential recruits back before the crisis – then the story was of explosive growth, of planned global dominance, and of steadily rising expectations of seniority and pay. You didn’t need to be Richard Roma to close that deal. It was an easy sell, in short.
How can Deutsche Bank hire people now?
Deutsche Bank's strategy for hiring senior staff is likely to be entirely predictable: it will be necessary to smash the thin glass plate and remove the ‘pay-what-it-takes’ chequebook from its red box on the wall. Senior people coming from more stable firms are taking a big risk. They would demand danger money and, if you really wanted their skills, you would need to pay up. Naturally, with the bank’s financial results improving but still somewhat anemic, the room to do this very often simply wouldn’t be available. As a manager you would need to pick your targets very carefully indeed.
Of course, an alternative approach would be to give the recruit a degree of seniority or a title that they could not have attained with their old employer. Tempt them with power or whatever ‘glory’ comes with a fancy business card. Either way, you would need to stretch to get to the offer.
With more junior targets you would need to be subtler. Just paying them whatever they wanted would overstrain the budget as well as potentially aggravating members of your existing team – members who, most likely, have remained loyal through the last few difficult years. It could get awkward.
Instead, my lunch companions and I agreed that our approach would be the old ‘get in on the ground floor’ tactic.
Deutsche is in a bad spot, but there are a few encouraging signs of a turnaround. Performance is improving and the bank still has an array of excellent, if slightly down-on-their-luck business units that may well rise again. Similarly, the capital position looks solid enough and – for now – the big legal liabilities look to have shrunk. It wouldn’t take many quarters of semi-decent results to make Deutsche look like the mother of all opportunities to ‘buy at the bottom’.
‘Get in now, just as the clouds are clearing,’ we might say to recruits, ‘then you can ride the escalator to the stars with fewer people in your way’. We’d sell it, we thought, like an estate agent selling a slightly run down house in a good area as a unique opportunity for a ‘doer upper’. Put another way, we’d sell it as a career call option. It’s the same pitch that was used back in 1990’s to build up the bank the first time.
Then, last, for German recruits, there might even be an appeal to patriotism. I always found it slightly baffling (having never worked in my entire career for a British concern) but the success of Deutsche Bank always engendered a strong sense of national pride among my German colleagues. ‘Come to Deutsche Bank and make it great again,’ might be a pitch that could convince a few.
Of course there are lots of things that could potentially go wrong with the story: a worsening economic situation in Germany; more big and as yet undisclosed legal claims; Deutsche being forced into an unwelcome merger (mergers are a massive pain and off-putting to recruits); or the risk of stepping on some other random landmine of the type that the bank has found so regularly of late.
‘But’, I’d probably say, as I sat across from the recruit and locked gaze, ‘all that’s already priced in; come on, take a chance; don’t think about the risk; think about the return.’
‘Someone has to win,’ I might say (with my fingers firmly crossed under the table)…
‘It could be you’.
Kevin Rodgers started his career as a trader in 1990 with Merrill Lynch in London before joining another American bank, Bankers Trust. From there he went on to work as a managing director of Deutsche Bank for 15 years, latterly as global head of foreign exchange. His book, “Why Aren’t They Shouting?: A Banker’s Tale of Change, Computers and Perpetual Crisis” was published by Penguin Random House in July 2016.