A new trauma awaits: Replacing fallen friends

The devastating staff losses suffered by financial services companies in the collapse of the World Trade Center towers have caused a corporate trauma that may be nearly impossible to salve.

But another task could be just as wounding – replacing key executives and talented staffers, especially in firms that served specific market niches.

Aside from the sheer logistics of finding qualified candidates, companies will also have to deal with the emotional aftershocks that follow major tragedies.

New employees who come aboard to replace those lost in the attacks will face the emotional pain and possible resentment of employees who survived.

“We don’t have models for this kind of devastating loss that wiped out the majority of certain firms,” says Joy Waltemath, a legal analyst on employment and human resources issues for CCH Inc. in Riverwoods, Ill., which provides business law information and software.

EMOTIONAL HURDLES

Handling “survivor’s guilt” – which in the corporate world is often associated with mass layoffs – will be one the biggest tasks human resources departments grapple with, says Ms. Waltemath.

“I think it is going to take tremendous sensitivity on the part of senior management and human resources to be able to try to restaff and rebuild,” she says.

“You are going to be looking for individuals who have an enormous sensitivity to the tremendous loss the organization has suffered.”

And while there could be some resentment of new staff members, “I think that it would not be an overt resentment. It would be more of an unconscious resentment on the part of employees left behind.”

John Challenger, a workplace analyst with Challenger Gray and Christmas Inc., a Chicago outplacement firm, suggests that new recruits will need to come in and help the organization heal.

“These [new recruits] are going to need to be rebuilders. These companies – not only are they concerned with the physical assets of the company … they also need to repair their human capital.”

Victims of the attack included some of Wall Street’s most talented people.

Fred Alger Management Inc., a mutual fund company in the twin towers, lost 36 of its 55 employees – including its president, portfolio managers and research analysts.

Keefe Bruyette & Woods Inc., the specialty investment banking firm also suffered significant losses. Key research staff, and chairman and co-CEO Joseph J. Berry are among 67 employees presumed dead.

Cantor Fitzgerald LP, the government bond trading company that occupied Floors 101 through 105 of one of the twin towers, lost about 75% of its 1,000-member New York staff.

“Even before this, good people in many functions were really in scarce supply,” says Mark Elzweig, who runs an investment management recruitment firm in New York. “Some of the people are probably irreplaceable.”

Fred Alger Management, which manages $16 billion, has taken some of its first steps to rebuild.

After the loss of its president, David Alger, as well as many portfolio managers and research staff members, the company has announced that David Hyun, who began his career at the firm, would come back on board. Mr. Hyun left Fred Alger a year a go to join OppenheimerFunds.

“We are sorry to see Dave leave the OppenheimerFunds, but understand and support his decision to return to Fred Alger Management in this particularly difficult time,” said Len Darling, chief investment officer at OppenheimerFunds, in a Fred Alger press release.

Mr. Hyun, who will manage all separate accounts and certain mutual funds, joins a portfolio management team now led by the firm’s chairman, Fred Alger, who returned from retirement to assume the day-to-day management of the company after his brother’s death.

WELCOME RETURN

“David Hyun has many long-standing friends among his colleagues at Fred Alger Management, and his return to our firm, particularly during this painful time, is very meaningful to us,” said Mr. Alger in a statement.

Bringing back former employees is one way for companies to begin rebuilding, says Russel Kinnel, director of fund analysis at Morningstar Inc. in Chicago.

But that is not always an option. For companies which, like Alger, will need to bring in experienced people who are new to the firm, the situation will inevitably raise cultural issues.

SHAPE OF CHALLENGE

“They may have a different strategy, and so I think integrating those people and finding people who, even if they weren’t with Alger, would be the right fit is certainly going to be one their challenges,” says Mr. Kinnel.

New employees could face resentment from co-workers, says Mr. Challenger.

“No question,” he says. “The emotions are stirred up, and people are more vulnerable to those emotions.”

Those new staff members need to “come in with open ears, letting people talk with them about their experience,” he says.

But prospective job candidates should not mention the disaster when approaching those firms, says Mr. Elzweig, the money management headhunter.

“The only tactful way to do it really is just let a prospective firm know they are available and leave it at that.”

Related Topics: 9/11, World Trade Center