The Blog

The Global Financial Crisis Remembered: How It Affected Workers In The Finance Sector

Ten years ago this week, the emerging global financial crisis rudely hit the shores of Britain. Northern Rock, previously a low risk and secure building society, was hit by the first run on a bank in Britain in one hundred and fifty years. This was because Northern Rock was unable to pay the loans it had taken out in order to sell more debt to customers. It was nationalised after failing to be taken over by two private bidders, fearful of the extent of the bank's bad debt. Something similar happened to the Bradford and Bingley bank, again previously a safe and secure building society. And, of course, the Royal Bank of Scotland and LloydsTSB were bailed out with billions of public money.

For a crisis that started in the financial services sector, relatively little is known about how it has affected the workers in this particular part of the economy. Not much is known about whether the fate of finance workers in the banks bailed out by the government was better or worse than that of those finance workers in the banks that remained in private hands.

In my recently published book, Employment Relations in Financial Services: an exploration of the employee experience after the financial crash, I explore these issues in terms of the processes and outcomes by which workers in the sector have been made to pay for a crisis and a calamity not of their own making. The book concentrates on their working conditions.

The torrid take is one of unprecedented levels of redundancies, unpaid overtime, below inflation pay rises, eroded pension entitlement and ever more oppressive management techniques. Finance workers are now working longer and harder for less in real terms. Those that are left in the sector can be seen as the most unfortunate ones because they are the ones having to pick up the pieces and do more with less.

Hundreds of thousands have left the sector as result of voluntary severance packages. The fear of redundancy was one of the main factors which resulted in remaining workers buckling under. Another was performance management systems whereby individual workers' pay rises are determined by managers' assessments. In this system, under-performance leads to a not so polite invitation to leave the organisation. Some have referred to this as 'being managed out the door'. The result has been workers chasing their tails to meet their ever growing number of targets. Trust in - and respect for - senior managers has been shot.

Under the pressure of delivering a return to the government on its investments, the bailed out banks have treated their employees in a harsher way than many of the still private banks. But that is of little comfort to those working in the banks that have remained in private hands.

As the economy in Britain teeters on the edge of another economic calamity, and as profitability in banking has returned, the need for full and proper regulation of the finance sector is greater than ever - and yet, with the strength of the banks, the current government is unwilling to introduce that much needed regulation. The result may well be that banks choose to respond to another crisis in the same way they did exactly ten years ago, namely, by making their employees pay for this in order to protect their own interests. That can only mean further attacks on workers' wages and conditions.

• For a book that unfortunately will be beyond the financial reach of many, consider getting your union branch or public library to order a copy.

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