THE vicissitudes of capitalism washed over my colleagues and I this week.
On Monday, while driving between Cork and Charleville, it came over the radio that our firm had been closed down with immediate effect due to accounting irregularities uncovered by the Central Bank. On the previous evening we were given the stark consequences. Statutory redundancies would take effect over the next four weeks. This was the final blow after four years of tough trading, salary cuts and downsizing.
“Headcount reduction” is a cold term often used when describing job losses. We all use clichés like “restructuring” and “rationalisation” to discuss company and industry changes that help immunise us from the human side of such change. Up close the reality is tougher. Young people trying to build a career have been abruptly stopped. Others, with young families and mortgages, face formidable financial challenges. Older colleagues who hoped to mature their careers in a conventional manner are forced to think differently. Some who have invested many years in the firm are unable to receive a corresponding redundancy payment because the requisite cash has gone.
Eliciting sympathy for stockbrokers is a forlorn exercise in the current climate. Unemployment is very high, emigration is rampant and company closures are a daily event. If an individual chooses to work in the private sector, the risk of failure always exists. That is something anyone fortunate enough to work in the public sector should always value. Of course, being part of a private company always offers the hope that in some years performance will be rewarded financially.
Over a period of 22 years working in stockbroking, I’ve had a fair share of ups and downs. On balance, my predicament now is less serious than it is for others both inside and outside our company.
The lessons here for others are many; (1) beware the risks of operating an unlimited liability ownership structure which can expose equity holders when things turn sour; (2) when times are good, build up reserves to ensure an ability to withstand pressures that are inevitable in a cyclical business; (3) defend an often onerous regulatory structure that is designed to eradicate risks to client monies. No client funds have being put at risk amid our company’s woes and; (4) always work hard to try and perform strongly in your chosen job. When things like this happen a track record with clients counts enormously.
It has been a strange 48 hours since the news broke. The amount of correspondence all of my colleagues have received is enormous and all of it has been genuinely supportive. Friends, clients and even competitors have touched base to show an interest in our prospects. Stuff like that gives individuals the confidence to pursue other opportunities and seek out employment within, or outside, the financial services sector.
I’ve argued in this column before that Irish stockbroking is not made up of a bunch of geezers in bowler hats with snotty accents. Instead, the firms involved contain a slice of Irish society that come from backgrounds as diverse as farming, teaching and the civil service. There are plenty of those caught up in this collapse and their difficulties are those shared with many others who have lost their jobs in this horrible recession. I’m not asking for the hankies to come out but a sense of balance is needed amid the caricatures that pour out at times like this.
A friend of ours who suffered a close bereavement some time ago got in touch to express her concern. How on earth my issues compare with hers is hard to comprehend but it says something about the human spirit when empathy like that surfaces in an event like this. Ireland may have many things wrong with it but the community spirit that lives here is unbeatable.
* Joe Gill was research director with Bloxham Stockbrokers before its closure.
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