As big Wall Street firms face difficulties convincing employees to return to the office in a post-COVID-19 environment, they are facing yet another headache from within their ranks: Growing demands to relocate out of New York to Florida.
Job headhunters say banks such as JPMorgan and Goldman Sachs have what is being described as a waiting list of executives looking to move to the Sunshine State primarily because of its lower cost of living, but also because of other quality of life issues including a lower crime rate. Manhattan, where both firms are located is dealing with a spike in crime and homelessness. Under Mayor Bill de Blasio crime statistics have risen in most categories with the New York Police Department reporting a 39.6% rise in grand larceny thefts last week for the four weeks ending June 6.
The demands from employees to escape from New York is just the latest twist in the big banks' efforts to return to workplace normalcy as COVID cases decline. It also coincides with another major trend as banks, hedge funds and other financial firms are increasingly opening new offices outside of New York to lower-cost locales.
Alan Guarino, vice chairman of the executive recruiting firm Korn Ferry, says the main attraction that Florida brings to Wall Street executives is that it doesn't have a state income tax. New York and New Jersey, where many bankers live, have some of the highest state income taxes in the country. Moreover, they plan even higher taxes aimed at high-earners that work in finance to pay for their expansive welfare programs.
One problem facing employees looking to move down to Florida: There just aren't enough internal jobs to meet the growing demand, say people with direct knowledge of the matter. At JP Morgan, for instance, the bank has instituted an "internal first" policy, thus executives already at the bank get first dibs on Florida job openings, these people say.
But these positions are said to be filled almost as fast as they're posted, these people add.
"The JP Morgan recruiter from Florida just told me he’s getting so much demand from employees in the northeast to move to Florida they're not even considering external candidates for those jobs," said one veteran financial services executive. "I hear the same thing is happening at Goldman and elsewhere."
A spokesman for JP Morgan and Goldman had no comment.
"There's a ton of interest to move to Florida, and just so many spots, which is why they're going to people inside the firm first," Guarino said.
Wall Street banking sources say recent remarks by Morgan Stanley chief executive James Gorman reflect the tension inside the big banks over executives seeking to move out of New York and to places like Florida.
Earlier Monday, during a company-wide town hall, Gorman commented " If you want to get paid New York rates, you work in New York. None of this, ‘I’m in Colorado and work in New York and am getting paid like I’m sitting in New York City’."
|JPM||JPMORGAN CHASE & CO.||158.54||+1.74||+1.11%|
|GS||THE GOLDMAN SACHS GROUP INC.||350.83||+6.17||+1.79%|
Like most big banks and financial firms, Morgan Stanley has also been grappling with how it will begin to bring its full workforce back to its Manhattan offices now that New York City’s COVID infection rates have fallen to some of the lowest levels in the country and around 70% of New Yorkers are vaccinated. Gorman has said he wants his people back at the office by Labor Day; firms like Goldman Sachs and JP Morgan have been even stricter, demanding that people return to the office immediately or face dismissal.
While many employees want to come back to the office, others have survived and thrived working from home, which largely began last March when New York City began a lengthy pandemic lockdown of businesses including banks. The work-from-home routine benefits employees by eliminating commuter costs and those with children because they can save on child-care costs, but banks say employees are more productive in the office, where they are monitored by management.
Even with this tension, the banks are increasingly moving out of the city, and Florida has become a favorite destination since many financiers have second home residences there.
Kelly Smallridge, CEO of Palm Beach Business Development Board, by her count, says more than 90 financial services have moved to the Palm Beach area, which has become a booming banking hub.
The firms include hedge funds, such as Steve Cohen's Point72, Elliott Management run by veteran financier Paul Singer, as well as high-frequency trading firm Virtu Capital.
People inside Goldman Sachs confirm that at least 100 traders and salespeople are going to be relocated to the Palm Beach area and that the firm continues to look to relocate people outside of New York. JP Morgan is also redeploying people outside New York but has expanded its list of alternative offices to Delaware, Ohio as well as Florida.
"I have never seen this level of incoming activity from the financial firms," Smallridge said. "I had to start up a concierge service to deal with the level of interest. As many as 15 firms are coming down the pike as we speak."