The Deloitte Talent in Banking Survey 2015 Switzerland in Focus

Survey findings Figure 1. Popularity of banking as a career choice among business students, globally, 2015

(0-10)% (10-20)% (20-30)% Over 30%

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

Could do better? Along with watches, chocolate and tourism, banking is central to Switzerland’s image, both at home and abroad. So it has been unsettling to see the popularity of the sector decline substantially among the country’s business students in recent years. The Deloitte Talent in Banking Survey 2015, however, sees a modest recovery in its fortunes as it returns to the top of students’ popularity rankings, albeit still significantly down on 2012 and preceding years.

Despite the currency shock of January 20151, which reduced expectations for labour demand, banks are still looking to hire. This appears to be driven by regulatory change, client demand, rising foreign competition and digitisation, all requiring highly-qualified staff2.

In 2015, 16 per cent of the employers selected by the surveyed students as one of their top five ‘ideal employer’ choices were banks. While this places Switzerland within the top ten of the 30 territories included in the survey, and sixth among 21 participating EMEA countries, its rank is perhaps not as high as might be expected given its history as a centre of private banking. Figure 2. Industry popularity among Swiss business students, 2008-2015

25%

Banks 20% Fast Moving Consumer Goods Fashion, Accessories 15% and Luxury Goods Tourism Software and 10% Computer Services Auditing and Accounting Management and Strategy Consulting 5% Transportation and Logistics

0% 2008 2009 2010 2011 2012 2013 2014 2015

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

Innovation drives greater popularity? Banking appears to have regained its position as the most popular career option among Switzerland’s business students, largely at the expense of fast moving consumer goods (FMCG), which has slipped by close to three percentage points since 2014. The banking sector has fallen behind and overtaken FMCG more than once in recent years, however, so this might change again in future.

Deloitte observations suggest that Switzerland’s banks are making themselves more exciting employment prospects by playing to their strengths in private banking and client service. Another continuing trend is innovation, such as the recent roll out of all-digital and crowd-funding platforms.

The greatest gain among the top eight industries was made by the fashion, accessories and luxury goods sector, which continues to be driven by the global success of companies like Rolex and the Swatch Group. The sector has more than tripled its popularity in the rankings since 2008, and still appears to be moving up the chart.

Figure 3. Top five most popular employers, Figure 4. Top five most popular employers, Swiss business students, 2015 Swiss banking-inclined students, 2015

Google 21.2% UBS 52.7%

UBS 17.7% Credit Suisse 36.0%

Nestlé 17.1% J.P. Morgan 19.9%

Credit Suisse 12.8% Goldman Sachs 18.7%

SWISS 11.8% Google 16.4%

0% 5% 10% 15% 20% 25% 0% 10% 20% 30% 40% 50% 60% Source: Universum Talent Survey 2015; Deloitte analysis Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions See Appendix for survey questions

The Deloitte Talent in Banking Survey 2015 Switzerland in Focus 2 Solid banking performance Google is the first choice ‘ideal employer’ among Switzerland’s business students as it is in 17 markets of the 29 relevant markets around the world. The US search giant employers “Zooglers” from 75 different countries in its Zurich engineering hub. However, the software and computer services sector as a whole slipped marginally in popularity this year following four years of consistent upward momentum.

UBS and Credit Suisse again both appear among the four most popular ‘ideal’ employers. Demand for the best graduates is high among the country’s banking giants, and is growing among regional and cantonal players.

Interestingly, four of the top five selections are Swiss businesses, implying a strong sense of national favouritism among Switzerland’s business students.

While the two top places in the equivalent chart for banking-inclined students are again occupied by the two home- grown giants, there is a powerful US influence over the remainder of the top five – J.P. Morgan, Goldman Sachs and Google. However, the Swiss influence is somewhat restored with the presence of Nestlé, Julius Baer and the Swiss National Bank in spots six to eight.

Figure 5. Career goals of Swiss banking-inclined students, 2008-2015 To be a leader or manager 70% of people To have work/life balance 60% To have an international career 50% To be competitively or intellectually challenged 40% To be secure or stable in my job 30% To be entrepreneurial or creative/innovative To be autonomous or 20% independent To be dedicated to a cause 10% or to feel that I am serving a greater good 0% To be a technical or 2008 2009 201020112012201322014 015 functional expert

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

Figure 6. Career goals of Swiss business students and Swiss banking-inclined students, 2015

50.8% To be a leader or manager of people 43.9% To have work/life balance 48.8% 52.4% To have an international career 45.7% 43.3% To be competitively or intellectually 45.5% challenged 43.5% To be secure or stable in my job 31.8% 26.9% To be entrepreneurial or creative/innovative 25.5% 35.5% To be autonomous or independent 22.7% 23.2% To be dedicated to a cause or to feel that 13.5% I am serving a greater good 19.1% To be a technical or functional expert 12.1% 9.2% 0% 10% 20% 30% 40% 50% 60% Banking-inclined students All business students

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

The Deloitte Talent in Banking Survey 2015 Switzerland in Focus 3 Leadership vacuum? Figure 7. Expected annual salary (EUR), Switzerland, 2015 For the first time since the survey launched, ‘work/life balance’ is not the most popular career goal among Switzerland’s banking-inclined students (although it Banking-inclined €75,737 has retained its lead among all business students). Now in second place on 49 per cent, ‘work/life balance’ is in line with the average of all markets included in the Investment €75,513 survey, but behind countries like Austria, Italy and the banking-inclined Czech Republic. However, its score in Switzerland is substantially ahead of both France and Germany. All business €73,614

The leading career goal for banking-inclined individuals in 2015 is the desire ‘to be a leader or manager of Source: Universum Talent Survey 2015; Deloitte analysis people’. Not only has this risen by four percentage See Appendix for survey questions points since 2014, it is also more popular by some seven percentage points than among all business students in 2015. This is an interesting development, as High hopes… a leadership vacuum has been perceived to exist in the The cost of living in Switzerland is the highest in the Swiss banking sector in recent years, potentially leading world,4 a fact that is reflected in the very high salary banking-inclined students to see an opportunity for expectations of the country’s business students. rapid progression. Banking-inclined students’ first-salary expectations have risen strongly to €75,737 from €66,010 in 2014. After several years of steady movement up the ranking, However, when currency fluctuations are taken into ‘job security or stability’ has slipped from the peak of account the rise in salary expectations among banking- popularity it reached among banking-inclined students inclined students is much less pronounced, increasing last year, possibly as a result of Switzerland’s low rate of from CHF 79,391 in 2014 to CHF 82,047 in 2015.5 unemployment. As in most countries surveyed, both banking-inclined The desire ‘to be entrepreneurial or innovative’, which students and investment banking-inclined students have scored as high as 35 per cent in 2008, has slid over higher salary expectations than their business school the years to just 25 per cent in 2015, suggesting that peers. Interestingly, the salary expected by investment future generations of bankers will take a more cautious banking-inclined students is actually lower than that approach than their predecessors. This is potentially expected by all banking-inclined respondents. This is a cause for concern as the value of innovation in perhaps because the focus of the Swiss banking industry banking appears set to rise, driven by digitisation and is primarily on private banking. increasingly sophisticated customer expectations.3

4 Figure 8. Swiss banking-inclined students’ top ten aspirations, 2015

Leaders who will support my development 1st

Good reference for future career 2nd

High future earnings 3rd

Recognising performance (meritocracy) 4th

Challenging work 5th

Professional training and development 6th

Prestige 7th

Competitive base salary 8th

Market success 9th

Attractive/exciting products and services 10th

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

Figure 9. Swiss banking-inclined students’ top ten expectations, 2015

Good reference for future career 1st

High future earnings 2nd

Financial strength 3rd

Challenging work 4th

Prestige 5th

Professional training and development 6th

Competitive base salary 7th

Client interaction 8th

High level of responsibility 9th

Performance-related bonus 10th

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

The Deloitte Talent in Banking Survey 2015 Switzerland in Focus 5 Promote the positives Deloitte sought to find out to what extent, and in which areas, the aspirations of banking-inclined students converge with, or deviate from, what they most expect from a career in banking.

When comparing the aspirations and expectations of Switzerland’s banking-inclined business students, there are clear reasons for banks to be both reassured and concerned.

First, they might find reassuring the fact that high-ranking aspirations such as a ‘good reference for my future career’, ‘high future earnings’, ‘challenging work’, ‘prestige’ and ‘competitive base salary’ are all reflected in the expectations that students have of employers in the banking sector.

However, there are two main causes for concern. Most importantly, the factor that heads the aspirations chart – ‘leaders who will support my development’ – is ranked at just 14th place out of 40 job attributes. Nearly as worrying, the fourth-placed aspiration – ‘recognising performance (meritocracy)’ – also fails to make the top ten expectations.

This suggests that banks need to promote such factors more strongly in order to attract the best talent away from sectors like FMCG and fashion, accessories and luxury goods.

Figure 10. Attractiveness of job aspects, all Swiss business students and Swiss banking-inclined students, 2015

5.0

4.4 4.4 4.4 4.2 4.1 4.0 4.0 3.9 3.9

3.0

2.0

1.0

0.0 Employer Reputation Job Characteristics People & Culture Remuneration & & Image Advancement Opportunities

All business Banking-included

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

Weighing up the drivers of choice When it comes to the relative importance of different job aspects in Switzerland, there is no substantial difference between the views of all business students and the banking-inclined subset. As in many other surveyed territories, however, the ‘people and culture’ aspects of a job (such as ‘supportive leaders’, ‘recognition’ and ‘a creative working environment’) are less important for banking-inclined individuals than for all business students. Similarly, ‘remuneration and advancement opportunities’ are more important aspirations for banking-inclined students than for the population of business students as a whole.

The Deloitte Talent in Banking Survey 2015 Switzerland in Focus 6 Figure 11. Student demographics, Switzerland, 2015

All Banking- Investment business inclined banking-inclined students students students Female 48.2% 37.0% 34.6% Male 51.8% 63.0% 65.4% Number of students 5,107 1,744 1,499 Average age 22.9 22.6 22.6

Source: Universum Talent Survey 2015; Deloitte analysis

Men in the majority An important factor that differentiates Switzerland from many other surveyed markets is the male bias among business students surveyed. In the majority of territories, the number of female business students surveyed outnumbers males, although the gap narrows or disappears among banking-inclined students. Men then tend to be in the majority among investment banking- inclined students.

In Switzerland, there is a male bias to begin with, which grows further among banking and investment banking- inclined students. The fact that only 34.6 per cent of those with an inclination towards investment banking are women suggests that Switzerland’s banks might be missing out on a rich seam of talent.

The Deloitte Talent in Banking Survey 2015 Switzerland in Focus 7 Macroeconomic context Figure 13. Overall and youth unemployment, Switzerland, 2010-2014

10.0% Figure 12. Growth in average monthly wages (US$), Switzerland, 2008-2014 8.0% $7,000 25.0%

$6,000 20.0% 6.0%

$5,000 15.0% 4.0% $4,000 10.0%

$3,000 5.0% 2.0%

$2,000 0.0% 0.0% $1,000 -5.0% 2010 2011 2012 2013 2014

$0 -10.0% 2008 2009 2010 2011 2012 2013 2014 Youth (Aged 15-24) Overall

Average wages (monthly, US$) Source: OECD Growth in average wages (US$; % annual)

Source: Economist Intelligence Unit Figure 14. Total banking assets in US$ bn and as % of See Appendix for notes real GDP, Switzerland, 2008-2014

$4,500 1,200% There was a sudden fall in total banking assets (TBA) in $4,000 $3,500 1,000% 2014 to US$ 3,534 billion (CHF 3,497 billion). Just the $3,000 800% previous year, Swiss TBA had appeared to be closing in on $2,500 the peak achieved in 2008 (US$ 3,987 billion (CHF 4,209 $2,000 600% billion)). However, when the fluctuating CHF/US exchange $1,500 400% $1,000 200% rate is taken into account, total banking assets actually $500 rose slightly in 2014, from US$ 3,879 billion (CHF 3,453 $0 0% 2008 2009 2010 2011 2012 2013 2014 billion) the previous year. Total banking assets (billion, US$) Although Switzerland is a high-wage economy, the Total banking assets as % of real GDP monthly average in 2014 of US$ 6,581 slipped from a peak of US$ 6,641 in 2011. However, much of this Source: Total banking assets, apparent slide is due to foreign exchange issues, driven by Economist Intelligence Unit; GDP, OECD See Appendix for notes the appreciation of the Swiss Franc (CHF) against the US$ during this period. This means that in CHF terms there has been some growth in monthly average pay, from CHF 6,240 in 2011 to CHF 6,511 in 2014. Unemployment has stayed consistently low by international standards over recent years, deviating little from 2014’s 4.5 per cent among the population as a whole and 8.6 per cent among people aged 15 to 24.

8 Appendix

Terminology Deloitte examined the survey results from 211,000 business students in Business students = students studying business-related subjects. 30 markets: in the Americas, Brazil, Canada, Mexico and the US; in APAC, Australia, China, Hong Kong, India and Singapore; and in EMEA, Austria, Banking-inclined students = business students who put at least one bank Belgium, the Czech Republic, Denmark, Finland, France, Germany, Ireland, (retail, investment or universal) in their top five ‘ideal employers’ when Italy, the Middle East (defined by Universum as Egypt, Lebanon, Kuwait, offered a list of potential employers to choose from. Qatar and Saudi Arabia), the Netherlands, Norway, Poland, Russia, South Africa, Spain, Sweden, Switzerland, Turkey, the UAE and the UK. The Investment banking-inclined students = business students who put at least number of markets included in global and regional averages varies between one investment bank in their top five ‘ideal employers’ when offered a 23 and 30. list of potential employers to choose from. It is a subset of the number of banking-inclined students. Currency conversions

About the Research Currency conversions into local currency use exchange rate data from OANDA. Rates are correct as of the 31st December of the relevant year This report is based on the Universum Talent Survey 2015. Universum has unless otherwise stated. been researching students’ career intentions since 1988. In 2014-15, it surveyed about 1.2 million students and professionals drawn from over 2,000 universities and institutions of higher education in 55 countries.

Note to Figure 1 Note to Figure 8 Survey question: “Choose the five employers you most Survey question: “Which of these are most important want to work for [from the list of employers you would to you? Please select a maximum of three alternatives consider working for], your five ideal employers”. [in each of the following four categories: Employer Banking popularity by market is calculated as the Reputation and Image; Job Characteristics; People number of times banking employers are short-listed and Culture; and Remuneration and Advancement among the five “ideal employers” in each market. Opportunities].”

Note to Figure 2 Note to Figure 9 Survey question: “Choose the five employers you most Survey question: “Which of the following [40 attributes] want to work for [from the list of employers you would do you associate with your chosen employer(s)?” consider working for], your five ideal employers”. Industry popularity by market is calculated as the Note to Figure 10 number of times employers for that industry are short- Survey question: “How important are each of the listed among the five “ideal employers”. aspects below to you? Please rate the importance of each aspect on a scale from 1-5.” Note to Figure 3 Survey question: “Choose the five employers you most Note to Figure 12 want to work for [from the list of employers you would Average wages (monthly): average gross earnings per consider working for], your five ideal employers”. worker per month

Note to Figure 4 Growth in average wages (annual): percentage change Survey question: “Choose the five employers you most in hourly wages in US$ over previous period want to work for [from the list of employers you would Figures are converted to US$ using an average exchange consider working for], your five ideal employers”. rate Note to Figure 5 Fluctuations in average wages could be partially due to Survey question: “Below is a list of nine possible career changes in the CHF/US$ exchange rate goals. Which are most important to you? Please select a maximum of 3 alternatives.” Importance of goals is then Note to Figure 14 calculated as the percentage of students choosing each Total banking assets for 2010-2014 are Economist career goal on their shortlist of top three goals. Intelligence Unit estimates

Note to Figure 6 GDP for 2014 is an OECD estimate Survey question: “Below is a list of nine possible career goals. Which are most important to you? Please select a Figures are converted to US$ using an average exchange maximum of 3 alternatives.” Importance of goals is then rate calculated as the percentage of students choosing each Fluctuations in total banking assets could be partially career goal on their shortlist of top three goals. due to changes in the CHF/US$ exchange rate. Note to Figure 7 Survey question: “What is your expected salary before tax at your first employment after graduation, excluding commission and bonus?”

The Deloitte Talent in Banking Survey 2015 Switzerland in Focus 9 Endnotes

1. Swiss National Bank scraps exchange rate ceiling”, Swissinfo.ch, 15 January 2015. See also: http://www.swissinfo.ch/eng/euro-floor_swiss- national-bank-scraps-exchange-rate-ceiling/41217364

2. Deloitte analysis

3. Deloitte analysis

4. “Cost of Living Index for Country 2015 Mid Year”, Numbeo, 2015. See also: http://www.numbeo.com/cost- of-living/rankings_by_country.jsp

5. Exchange rate as at August 17, 2015

The Deloitte Talent in Banking Survey 2015 Switzerland in Focus 10 Contacts

Jürg Frick Damien Leurent Senior Partner Partner Banking Industry Leader EMEA Banking Co-Head +41 58 279 6820 +33 1 40 88 29 69 [email protected] [email protected]

Sarah Kane Nick Sandall Partner Partner Consulting EMEA Banking Co-Head +41 58 279 6873 +44 20 7007 1850 [email protected] [email protected]

Dennis Brandes Margaret Doyle Manager Partner Insight Head UK Financial Services Insight +41 58 279 6537 +44 20 7007 6311 [email protected] [email protected]

About the authors Margaret Doyle, Peter Evans, Cem Turan and Christopher Ross comprised the London-based Deloitte UK Financial Services Insight team, and Gaurav Narula and Vishwanath Sonnad the Hyderabad-based Financial Services research team that worked on this report.

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