As anyone in business knows, the recent recession hit the financial sector particularly hard. Here, the banks were both cause and effect in relation to the economy, contributing largely to the economic meltdown as well as seeing their fortunes and workforces suffer as a result of it.
As in many industries, hiring within finance ground to a halt during the recession. According to Ken Johnson, managing director for North America at 7city, this caused what these companies were doing with learning to stagnate. The philosophy was, “We don’t want to invest in anything new and anything different right now,” he said. “We just want to do the basics so we can keep people at their desks and they won’t do too much damage when they get there.”
7city is a learning and development company focused exclusively on financial services. It works with larger investment banks and asset management organizations, both domestically and globally, preparing employees, both new hires and experienced ones, to get them “desk ready” and help them contend with the changing requirements and demands that the evolving market places upon them.
Johnson said there has been a pronounced change in the past year in what financial companies want from learning — particularly in terms of how it’s delivered. “Perhaps it would have started somewhat sooner, but given the steep downturn in hiring at these institutions, [there were] massive budget cuts in learning and development,” he said.
The key difference now in learning delivery at these companies comes down to context over content. “Obviously content is important,” Johnson said. “Banking professionals certainly need to know what they’re talking about. Content-based mistakes can cost an organization hundreds of thousands and potentially millions of dollars. But context is increasingly important.”
What context means here is teaching employees by presenting them with real-world financial circumstances and challenges. “It’s not the typical chalk-and-talk type program that we’re running with our clients right now,” he said. “We’re officially moving away from [that] where typically you’re running through hundreds of PowerPoint slides.”
Instead, 7city presents students with real, potentially even ongoing, transactions. “For example, HP and Dell were grappling over how much to pay for an upstart technology company, and it was hot in the news back in end of summer, early fall of last year,” Johnson said. “So we’ll use that information that’s publically available and work with these students to come up with potential recommendations on what they think would be the right evaluation process or approach or whether or not to pursue this given acquisition or merger.”
To accomplish this, 7city uses computer-based simulations as well as trading simulations that replicate the overall sales and trading environment a financial manager faces in working with clients. It’s not uncommon for 7city to give students access to companies’ 10-K forms — annual reports required by the U.S. Securities and Exchange Commission that give a comprehensive summary of a public company’s performance. “Rather than just going through a workbook whereby we walk through the steps of accounting, we’ll provide real 10-Ks of an organization and use that as the vehicle, a situation that those organizations are facing right now [and] grappling with,” Johnson said. “For example, how much should we pay for this potential acquisition? Should we acquire it in the first place?”
This hands-on approach is apparently increasingly needed given the influx of employees from Generation Y entering the financial services workforce today. According to Johnson, such hands-on training methods help members of Gen Y understand why they may not be ready to move directly into senior analyst positions. “These individuals are used to being given roles and responsibilities that afford them opportunities to punch above their weight, so to speak, perhaps before they’re really capable of doing that,” he said. “[7city’s context-based training] does help minimize the impact of these expectations somewhat. They realize that what they’re doing truly is important to the bank and the organization and not just the standard ‘because we’ve always done it this way’ and [so they have] to suck it up for a couple of years.”
Another advantage of such a hands-on approach as it relates to the incoming, younger workforce is it allows banks to set employees to work quickly, which is wise as they may not be around for long. “Given the job switching that goes on, particularly for some of the more junior banking professionals, typically you only have about two years with them,” Johnson said. “They don’t really become truly productive for 12 to 18 months into their roles. So the emphasis is to try to re-create as much as possible the inevitable role they’re trying to play when they get back to their desks.”
Daniel Margolis is managing editor of Chief Learning Officer magazine. He can be reached at firstname.lastname@example.org.
Click here to read more of CLO’s coverage of the tools and technology impacting learning this year via our Special Report on Learning Delivery.