It has been an exciting time on Wall Street to say the least. The US government conducted rescue operations to bail out AIG, Bear Stearns, Fannie Mae and Freddie Mac. Lehman Brothers was allowed to crumble and Merrill Lynch was sold to Bank of America. Leadership has failed Wall Street, and some would argue Wall Street has failed the world’s financial system.
So, HR directors can perhaps seize the opportunity to use the current situation to their advantage. They can learn from what has happened, and what can be done. Three suggestions: headhunt, train, and demand accountability.
First, headhunting. If we follow China and India’s lead, it’s prime headhunting time. Within hours of Bank of America's agreeing to buy Merrill Lynch, it was reported that Indian financial services firm Ambit had hired five Merrill executives – a sign that Asia hopes to gain from the huge Wall Street layoffs. No matter what happens, good people are needed in every organisation. With some 40,000 Wall Streetjobs expected to be axed, there will be a lot of top people twiddling their thumbs. Not just on Wall Street, but worldwide.
On the other side of the coin, headhunting might be last on the agenda for some HR departments, given widespread recruitment freezes. But nothing lasts forever and – according to Rhicke Jennings, managing director of FedEx Australia and New Zealand– if there is capacity then it’s a great opportunity to focus on people development and skill sets. Doing so means that when the economy strengthens again, your company can come out more aggressive than ever.
Finally, demand accountability. Executives at these troubled firms may have ignored or failed to see the level of risk their companies were taking on in their quest to enhance, what some would regard, as their exorbitant bonuses and even fatter profits,but it may have been difficult to do so. Greed was part of the culture, pervading from top to bottom, and culture is difficult to change.
Since it is the job of HR to develop leaders and cultures, we might also ask whether HR could have done anything to engender a less self-serving and more prescient leadership culture.