In his classic book On the Psychology of Military Incompetence (recommended reading for anyone interested in high-stakes organizational cock-ups and leadership hubris) Norman Dixon discusses the difficulties of recruiting talented people to military careers in peace-time:
“Needless to say, a perceived decline in the attractiveness of a military career may actually deter those who might otherwise have opted for one. According to Alexis de Tocqueville, this is particularly so in democratic armies during times of peace.
‘When a military spirit forsakes a people, the profession of arms immediately ceases to be held in honour, and military men fall to the lowest rank of public servants; they are little esteemed and no longer understood … Hence arises a circle of cause and consequence from which it is difficult to escape – the best part of the nation shuns the military profession because that profession is not honoured, and the profession is not honoured because the best part of the nation has ceased to follow it.’ “
We saw similar dynamics in relation to financial services post 2008, to the benefit of teaching, engineering and manufacturing. All of these came more into their own as attractive occupations for talented people once the Great Recession reduced both the availability and prestige of financial careers.
In an upturn, however, how will non-financial firms retain talent seeking to migrate to finance? They won’t be able to do it with money – they will need to come up with something more compelling.