As yet another round of bank bashing gets underway it’s been interesting to see how the salaries of bank executives are being compared with the plight of regular bank employees. This happened when Lloyds executives were asked to ‘hand back’ part of their bonuses and most recently with news of HSBC’s executive pay awards .
There’s a sense that regular bank employees deserve their jobs more than their leaders deserve theirs . Or even worse, that high pay for executives is in some way contributing to job losses for colleagues further down the hierarchy. This is quite a shift from a few years ago when all bank employees, whatever their stripes, were viewed as being culpable for the economic crisis and deserving of public scorn.
I remember in 2009, when I worked for one of the partly state-owned banks, members of the public coming into branches and saying to staff things like: “you work for me now,” or “I pay your wages.”
There’s still a bit of that, but the mood has definitely changed. Why? Partly it’s because people have recognised that most bank employees have absolutely no involvement in a banks’ riskier activities. A cashier in a high street branch knows nothing of an investment bank’s complex and mysterious financial instruments.
But it’s also part of a broader change in the way regular employees of any organisation are viewed. The 2012 Edelman Trust Barometer shows a significant jump in the trust levels for ‘people like me’ (22 points) and ‘regular employees’ (16 points). At the same time trust in CEOs fell by 12 points. (While of course, banks and financial services continue to languish at the bottom of the industry trust league table.)
There’s now a feeling that ‘we’ are all in this together – regular people struggling through difficult circumstances. ‘They’ – executives – however are not sharing the pain.
This is a dangerous state for business leaders in every industry and particularly in financial services. Leaders urgently need to rebuild consumers’ trust in them and their organisations. The clever, talented, ambitious people who become senior executives and CEOs will always earn more than others. They need to make a stronger case why that is so and why it’s deserved.