As startup culture continues to thrive, the allure of being attached to a prestigious corporate entity is dramatically diminishing. What, if anything, are the old guard doing about it?
Staff turnover is a problem for almost every company—finding and retaining talent is a headache that never ends, whether you’re a large corporation or a small-scale startup. Of late, however, it seems you can’t turn a corner without meeting a banker who’s paid their dues at a multinational conglomerate, and is taking that training and their savings to head for greener pastures—a startup.
It used to take a real leap of faith to embrace the risk associated with startup life, but the stigma surrounding that jump has long abated. Google “leaving corporate job for startup” and you’ll find article upon article detailing considerations aplenty. But with entrepreneurial culture flourishing, the term “startup” doesn’t have to mean three romantics in a basement working for peanuts and a dream—it can also mean fancy co-working spaces, plenty of venture-capital cash to burn and a team of pedigreed strategic advisors providing much-needed endorsement and connections.
If you put it that way, why would anyone want to stay at a big corporation, dealing with the inflexibility, bureaucracy and ladder-climbing needed to make it to the top?
Loretta Chan, a partner with Wellesley, a top-ranked executive-search firm that works primarily in the finance space, says this is an issue that's plaguing banks nowadays. “There’s definitely a trend towards people leaving the banking industry to go join startups. Because of this, the pool of talent has shrunk—and with that, it’s become harder to bring in strong talent,” she says.
You’d imagine that Bulge Bracket banks—the big guys— would be concerned. But in many cases, it’s to the contrary, particularly when it comes to well-compensated managers at a senior level. “Banks are facing cost restraints due to global issues, and the best way for them to do that is to ‘juniorise’. There’s a feel that specific roles outside of very senior management can be filled with junior staff instead, particularly when it comes to execution.