Dozens of perks both large and small have vanished at financial firms in recent months as the recession has deepened. Sadly, Deutsche Bank employees can no longer expect to be reimbursed for "adult entertainment." They're also barred from checking into hotels early. (Those who arrive for a morning meeting are expected to shower and shave at the airport rather than charge an extra day at the hotel.) Many junior UBS staffers are now being forced to fly coach. Goldman Sachs informed employees in London that they'd have to cut back on taxis and and meals; traders at Goldman in New York now have to buy their own beverages. (The bin of free soda and bottled water was removed.) And employees at various firms say the office temperature has gone up as firms try to keep energy costs under control.
What's next? Will banks elect to swap out Town Cars with courtesy bicycles? A study by the management consulting firm McKinsey finds that "symbolic" cutbacks (like denying a lonely banker a $9.95 adult pay-per-view movie) can be morale-killers, and the savings are not often worth the toll it takes on employees' emotional well-being. One of the much simpler and more effective ways to reduce spending, a tactic that won't be much of a morale-booster to McKinsey's own workforce: cut back on high-priced consultants.
Kinder, Gentler Cost Cuts on Wall Street? [Dealbook]
Identifying the savings opportunities at investment banks [McKinsey Quarterly, reg. req'd.]