By Lori Pizzani, Mutual Fund Careers Editor and Columnist
February 2003
Trend Spotting in the New Year
It doesn't take a nuclear physicist to recognize that the mutual fund industry is continuing to change and evolve. This transformation is attributable in large part to the three-year bear market which has knocked the industry off its high platform, and perhaps forever reshaped how careers will be built within the mutual fund industry.
Add to that the concerted effort by many of the industry's big players to chase the higher end, more affluent investor through customized separately managed accounts, and offer investment vehicles which embrace alternative investments not tied to the sentiment of the market, and you can see the sands shifting -- one grain at a time.
For many firms, college savings plans (529s) have come into focus as the next big market to tap, right behind retirement savings programs. Institutional sales channels, once the domain of only a few fund groups, have now become the overcrowded battleground where many players compete for assets. No longer are myriad firms elbowing each other to win over the hearts and wallets of the direct investor. Now the spoils go to those who can mesmerize various financial sectors of advisors and intermediaries. Stand still long enough and you can feel the shifting sands just below your feet.
So what does this all mean for those intent to build their careers within the fund industry? It means it may be time to rethink directions, reassess skills and reconsider what path lies ahead.
Same Skills, Different Venues
For those caught up in the whirlwind of the last two years' industry layoffs, downsizings, cutbacks, and staff trimmings, take heart. Skills formerly reserved for career growth within the mutual fund industry are apt to find you an alternate home if you keep your options (and your eyes) open.
There's no debate that many fund companies are cutting staffs directly tied to mutual funds, but many firms are shoring up staffs in other ancillary investment management areas and looking for mutual fund backgrounds and experience that will readily transfer to new product lines and untapped fertile arenas.
Case in point: One international money management firm is currently searching for a high powered vice president in charge of alternative investments. Among the skills and know-how the firm requires for this low six-figure income job is prior experience as the "managing director of a mutual fund company."
Other opportunities to transfer skills are similarly popping up. A large accounting, tax and business accounting firm in New York City is scoping out candidates for a hedge fund's back office. The main requirements? Candidates must have "financial services and mutual fund/fund accounting experience!"
Another, rather blatant job opportunity begins with the eye-catching phrase "Accounting Supervisor -- Tired of Mutual Funds?" In no uncertain terms the search firm looking for viable candidates states that it is seeking an "experienced mutual fund accounting pro … for corporate oriented accounting role." This is yet another example of mutual fund expertise that can easily transfer outside of this suffering industry.
In many cases, the mutual fund industry is now seen as the boot camp training ground that qualifies one to move and grow careers in other industries.
(For more observations on changing trends, see the accompanying article, "Job Market Update: A Recruiter's Perspective.")
Same Venues, Different Skills
Okay, so these may not be your idea of the "perfect job," but mutual fund companies are active business enterprises after all, with a variety of real needs. Here are two current, perhaps unconventional, job openings now available:
1) A Boston-based money manager is digging for a forklift operator to "pick orders" at its warehouse on the graveyard shift (11:00pm to 7:00am). Operator will need to complete a safety course and be able to lift up to 50 lbs. (and scale pallid portfolios in a single bound...)
2) PayPal (operator of a money market fund for web site auctioneer Ebay) has a yen for customer service reps to work full-time nights and weekends at its Omaha, Nebraska call center. Candidates with one to three years' experience in banking, brokerage or mutual fund service must be fluent in Japanese (ability to order sushi and tempura in native tongue is a plus.)
Security Matters
The events of September 11, 2001 have forever changed all of us. A money manager in New York City is looking for a disaster recovery specialist to lead in coordinating, assessing, and communicating recovery requirements to technology departments so that hardware and software recovery systems can be formalized, tested, and ready to roll in case a disaster strikes.
On the other coast, a company is searching for a disaster recovery coordinator to facilitate recovery and planning efforts, identify critical processes and priorities, and analyze department relocation plans and the availability of resources.
*****
On a related note, a brand new job has been cropping up at corporations across the nation. According to Cutting Edge Information, a business research firm in Durham, N.C., 30% of U.S. corporations have created new positions for chief security officers, whose job is to contribute to an overall corporate safety strategy and protect corporate assets, since the September 11th attacks.
Market Downdraft Doesn't Drag 2002 CEO/CFO Pay
Survey says...financial industry chief executive officers and chief financial officers saw pay raises in 2002, despite the continued market declines. According to studies by Buck Consultants of New York, cash compensation for financial CEOs rose 16% last year, while pay for CFOs rose a more modest 5%.
Fixed income managers also saw increases of about 10% last year, while equity managers' pay sank 12%.
Rank and File Can Expect Slimmer Raises
Also according to Buck, overall U.S. employers have planned for a 4% pay raise for employees in 2003, a slight increase from the average 3.9% raise granted in 2002.
But not so fast, reports The Conference Board of New York. They estimate that salary increases will max out at only 3.7%, down from the 4% originally planned by employers earlier in 2002.
The good news? The Conference Board predicts inflation in 2003 will be a modest 3%, leaving employees in the black.
But wait...another party has weighed in with its salary predictions. A survey of 130 large U.S. corporations from Deloitte & Touche of Chicago reveals that aggregate pay increases will only be 3.5% this year, the third straight year of modest pay raises.
The Family-Size Popcorn
Soothsayer/trend expert Faith Popcorn is back with her predictions for 2003. Among the trends taking hold this year will be a return to "family first" priorities. Popcorn predicts that there will be a new focus on ways to increase time spent with family, and decrease time spent working and making money. Instead of living to work, people will resume working to live. The trend is being fueled by September 11th trauma waves, family pressures -- especially from teens who crave more time with parents -- and less emphasis on making money; a fallout from the recent financial scandals.
Also, watch for 4-day work weeks to emerge with "Family Fridays" capping off the week.
New Year's Resolution: A New Job!
More than one-third of workers (35%) expect to change jobs this year, according to a survey from CareerBuilder.com. What's motivating job changing hopefuls? A lack of career advancement with their current employer, dissatisfaction with pay, and lack of job security topped the list of complaints.
A New Plight to Consider
Seeing reduced productivity among co-workers? Blame it on"presenteeism."
The newly coined expression, which represents the antithesis of "absenteeism," describes cases where overworked employees, trying to do more work with less resources, are neglecting to take days off from work and are simply stressing out. Symptoms include workers showing up at work even when they are visibly ill, being distracted or depressed or otherwise appearing "impaired."
The result? Employees suffering from presenteeism don't fare well, aren't productive, and appear to be unable to effectively manage stress, according to the Institute for Healthy & Productivity Management in New York.
The High Cost of Absenteeism
The average per-employee cost for unscheduled worker absenteeism reached an all-time high in 2002, topping out at $789 per year, according to the 12th annual survey conducted by CCH, Inc. of Riverwoods, Ill., a human resources and employment law information company. That per-employee cost was up from $755 in 2001. That can translate into annual price tags of as much as $60,000 for small companies, while the largest employers are having their pockets picked to the tune of $3.6 million per year.
Despite absentee cost inflation, absentee rates actually fell slightly last year from 2.2% in 2001 to 2.1% in 2002.
While personal illness accounted for one-third of all missed days, 67% of employees had other issues which included family needs, personal needs, stress, and the desire for a mental health break.
Not surprisingly, morale makes a difference, the survey found. Companies with very good or good employee morale reported lower absentee rates.
Laid Off Employees Likely to Sue
Work force cuts, accompanied by a flood of wrongful practice allegations including age and race discrimination and whistle-blower retaliation, will fuel a Tsunami of lawsuits against employers this year, predicts a survey sponsored Atlanta law firm, Arnall Golden Gregory.
"Being laid off is almost always a traumatic experience for employees, but is particularly so right now since the job market is somewhat depressed," said Charles T. Hiddleston, chairman of the firm's employment law practice. "In this environment, an employee who feels he or she was let go wrongfully is more likely to seek legal action."
