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Wall Street Executives Fret About Talent Drain

New regulations combined with years of scandals and bad press has driven executive talent away from Wall Street and into Silicon Valley.

The departure of employees may force Wall Street to consider a wider range of people for positions. Heidrick & Struggles' Boehmer gave a presentation to a group of young professionals in Davos about his biggest challenge recruiting for big banks these days: getting executives to think creatively when filling positions.

In the presentation - called "Hiring an oddball" - Boehmer described how hard it is to get bank executives to hire creative and "quirky" leaders who do not "fit in" with the prototypical suited-up Wall Street mold, but who could help revolutionize the industry.

Instead, those quirky types are sought by Silicon Valley, and they may be happier there. Many prefer the laid back atmosphere, not to mention the challenges of building a business, and the promise of lucrative rewards at companies like Google, Facebook and smaller startups, Boehmer said.

"Banks are not getting top-level talent out of universities anymore, so in 10 to 15 years, there could be a big problem when it comes to leadership at the senior level of these firms," Boehmer said. "They're seeing big gaps in talent."

Boehmer said he performed a search for a technology position at a major investment bank, calling on candidates from Silicon Valley who might be lured to New York with mega-paychecks. He was denied by everyone he approached, he said.

On the flip side, Heidrick & Struggles also did a search for a mobile-payments company on the West Coast that was looking for someone with financial expertise but offered just one-quarter of the pay. In that case, "we got tons of applicants," said Boehmer.

Jack Dunn, president and CEO of FTI Consulting, recalled a recent conversation with a friend's son who is about 35 years old and works at a major Wall Street bank.

Despite having a lucrative pay package and senior title, all the son talked about was finding an exit strategy, Dunn said.

"When I was young and didn't know any better, I would have thought it was a dream job," said Dunn, a former investment banker. "It's a problem because we're going to need someone to pick up the pieces, and a lot of the best people are leaving these firms."

Copyright 2013 by Reuters. All rights reserved.

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