Government Hiring May Be A Mirage

By SHELLY BANJO | Dow Jones Newswires | July 29, 2009

After Erik Lam was laid off from investment management firm AllianceBernstein last fall it seemed working on Wall Street had lost its luster.

He saw that agencies like the U.S. Securities and Exchange Commission and the Federal Deposit Insurance Corp. were advertising for financial professionals. So he set his sights on a government job.

"Wall Street wasn't the sexy place it used to be and influence was moving from Wall Street to Washington," Lam said.

A graduate of UCLA and New York University's Stern School of Business, he'd spent a year learning Chinese at Peking University in Beijing before taking a buy-side equity research associate position at AllianceBernstein and figured he had the kind of skills and training Washington was looking for.

What he didn't figure on was how frustrating the search would be.

Government agencies caught with their regulatory pants down by the financial crisis and a string of massive investment scams had vowed to be more vigorous and effective. One way they pledged to do this was by beefing up their workforce, hiring financial professionals with private sector experience. There was talk of 20,000 new jobs in these agencies by 2009.

The hiring binge sounded like a blessing to the thousands of financial services folks out of a job or fed up with the industry. Nine months later, Lam is one of many still out of luck.

In April he handed out resumes and waited in hour-long lines at a New York Society of Securities Analysts government job fair. He said a few agencies called and emailed him, encouraging him to apply. One specific lead he is following "could take up to a year and, when you're not working, it's not that easy to wait."

He's now opened his search to the private sector as well as government jobs. He's doing some consulting, learning to cook and trying to stay abreast of the news.

To be sure, government hiring typically takes at least twice as long as the private sector. With so many candidates flooding the job market, hiring has slowed down everywhere, said Richard Lipstein, managing director of Boyden Global Executive Search.

Year to date, the FDIC said it has filled almost 1,000 jobs and looks to fill another 1,000 positions. Other agencies also have been doing some hiring but, judging by the USAjobs.gov Web site it's not happening fast: The SEC has only 17 positions listed there, while there are just five openings each listed on the Web sites of the Commodity Futures Trading Commission and the Office of the Comptroller of the Currency.

Even if these positions are filled, they won't come close to filling the gap left by the almost 30,000 finance industry layoffs this year in New York City alone. Industry professionals say it's not for a lack of will, but of funding.

"They say the government is hiring more, but on the other hand when you go to the websites it's like well, where are the jobs?" Lam said.

Many still are on the wish lists of agency heads like SEC Chairman Mary Schapiro. Between 2005 and 2007 the agency lost a tenth of its employees, bringing the SEC's staff to roughly 3600 people overseeing about 35,000 registered companies, she recently told Congress in a plea for more resources.

Without necessary funding, the amount of people these agencies want to hire will be limited.

And of course pay scales won't resemble those of Wall Street. While compensation is up to six or seven figures at top posts in the private sector, the highest-paid management jobs at government agencies typically don't exceed $250,000.

The government will have a hard time attracting top candidates because compensation is "grossly inadequate. Those folks are overworked and underpaid," said Richard Nummi, a former SEC attorney who now heads Accounting & Compliance international, a New York-based consultancy.

Write to Shelly Banjo at shelly.banjo@wsj.com