Ally Financial Revs Up Hiring

Ally Financial, the lender formerly known as GMAC, is stripped down and posting hundreds of job openings after a major retooling precipitated by the crisis.

The Detroit-based firm, which became a stand-alone bank in late 2008, is angling for a bigger share of the auto finance market and has a new online banking platform offering checking accounts and a range of CD products. The firm is slowly building out both units in advance of a hoped for initial public offering next year, according to Ally spokeswoman Gina Proia.

"Over the past few years, there's been a number of changes, not the least of which has been transitioning from a captive organization to a market-driven organization," Proia said. "In short, we're continuing to add the talent and capability where we need it."

Like many of the Detroit-built cars that it financed over the years, Ally used to be much bigger and less efficient. In 2009, it trimmed 17% of its workforce as it sold some units in Europe and laid off employees in the U.S.

At the end of 2009, Ally had 18,800 employees.

The bank declined to provide a more recent headcount; however, there were 214 jobs openings listed on its Web site this week, including 25 postings in risk management and a number of financial analyst positions in Detroit.

"It's more just an effort to streamline overall and look at ways to be more efficient," Proia said. "It's about focusing on our key markets and our key lines of business."

The company is trying to gain market share with car dealers that sell its financing to customers. It also hopes to gain market share among young car-buyers.

Ally has been boosted by resurgent auto sales. In the most recent quarter, it lent $8.3 billion to U.S. car-buyers, a 48% increase over the year-earlier period. And the firm recently inked agreements to provide financing for U.S. Fiat sales and Chrysler dealers buying vehicles wholesale.

Ally returned to the unsecured bond market in February and sold almost $1 billion in asset-backed debt last month. The company hopes to sell shares to the public next year in order to repay roughly $17 billion in federal bailout money.

GM, however, recently bought AmeriCredit Corp., effectively giving it an in-house financing option. Ally financed a little more than one-third of GM vehicle sales in recent months.

PwC Hiring 10,000 in Asia by 2016

Accounting giant PricewaterhouseCoopers is looking to meet the increased Asian demand for financial services pros by adding 10,000 new jobs in the region over the next five years. The new hires are set to join PwC's 10,000 employees already based in mainland China and Hong Kong, where portions of its advisory and consulting businesses are based.

PwC's current Asian operations include advising and consulting practices for M&A, corporate finance and restructuring, and financial due diligence. The growth will be centralized in the firm's advisory arm. Specifically, the firm will add 2,000 fresh graduates to their Asia-Pacific ranks in 2011, and will more than double its headcount in its Guangzhou, China, location, bringing in 650 staffers to fill its newly expanded downtown office space.

Barclays Capital Plans Layoffs

Barclays Capital, the investment-banking unit of Barclays PLC, will announce plans to lay off several-hundred back-office staff as early as Wednesday, according to a person familiar with the matter.

The job cuts come following Barclays' expansion of its investment-banking unit, spurred by the London-based bank's purchase of Lehman Brothers Holdings Inc.'s North America operations in September 2008.

Barclays has increased its head count by several thousand in the past year, to 25,500, and cuts could raise questions about timing of the build-out.

Market activity slowed in the second quarter, affecting all investment banks. At Barclays Capital, revenue fell 15% in the second quarter from the first quarter and its cost-to-net-income ratio rose to 69% from 57% in the first quarter.

The person close to the matter said the back-office cuts are routine, and Barclays will continue to hire people for roles in the investment bank through the end of the year, especially in areas like equities.

At a half-year results presentation last week, investment-banking chief Robert E. Diamond Jr. said BarCap's expansion was on track.

Employer Credit Checks May Soon Be Illegal

A majority of employers pull credit reports of prospective employees during the interview process. According to a survey conducted by the Society of Human Resource Management , 60% of employers admitted to screening an applicant’s credit before filling some of their openings.

The good news is that the cycle may not continue for much longer. Many states and even the federal government are taking steps to ensure that a candidate’s bad credit report isn’t issued to evaluate a prospective employee, especially since the report was never intended for that particular use.

“The [report] is designed to determine the likelihood of someone defaulting on a loan, not whether someone would make a good employee,” Brad Clarkson of the National Association of Professional Background Screeners points out.

Additionally, Larry Lambert, President of Employment Screening Services, Inc., explains that a credit report pulled for employment purposes doesn’t contain an actual credit score. Under the Fair Credit Reporting Act, that is illegal. Once obtained, the report will disclose mortgage and consumer debt payment records, delinquencies, charge-offs, levels of debt and personal bankruptcies. As such, many employers use it as a defacto character reference, essential to determining whether or not an employee can do the job in question. Employers can’t pull your credit report without your permission, but most jobseekers will sign off on the request forms for fear of losing out on the position.

From the employer’s prospective, the rationale for checking credit reports is often based on some degree of extrapolation.

“Sometimes it's because the position actually handles cash, and they want to see whether the job-seeker has a dire financial status that, the employer believes, might create a greater-than-usual incentive for employee theft,” workplace expert and former Fortune 500 HR executive Liz Ryan explains, “Sometimes it's because the employer believes in a made-up correlation between credit problems and general irresponsibility on the part of the job applicant.”
Either way, she adds, employers researching an applicant’s credit history operate on a slippery slope.

“What's next?” Ryan asks. “Asking a job-seeker whether he or she is married, or has ever been depressed, or has ever had negative thoughts about a boss or employer?”

These sentiments are why three states – Washington, Oregon and Hawaii – have banned employers from arbitrarily pulling credit histories. Sixteen other states are currently trying to implement similar legislation. Additionally, according to The New York Times, Rep. Steve Cohen (D-Tenn.), is pursuing his own legislation that would prohibit employers nationwide from using credit checks to discriminate in hiring.

All versions of these laws, in essence, prohibit employers from pulling an applicant’s report unless there is a clear, legitimate business reason for it. For example, Lambert explains a maintenance company wouldn’t be able to request a credit history when they are hiring a janitor. They would, however, be able to if they were hiring a company accountant.

“There can be legitimate reasons to pull a credit report,” Lambert says. “You wouldn’t want to hire someone on the edge of bankruptcy to take care of your assets.”

The drawback is, however, that bad credit can be caused by any number of things, including not being able to pay bills due to long periods of unemployment. Luckily for jobseekers, some companies are cognizant of this cyclical effect.

“My business does extensive background checks for new employees, but we purposefully do not do credit checks,” Healy Jones, head of marketing for document-scanning service Office Drop, tells MainStreet. “Even hardworking people have been losing jobs since the economic downturn. It doesn’t make sense to discriminate against someone who worked hard their whole life and then lost a job and had problems meeting obligations."