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Employment Changes from 2001 to 

2005 for Occupations Concentrated in 

the Finance Industries

By Fatemeh Hajiha

Fatemeh Hajiha is an economist in the Division of Occupation Employment 

Statistics, U.S. Bureau of Labor Statistics.

A	healthy and vibrant economy requires a fi

	system that promotes economic efficiency. The 

	nance industries provide a wide variety of financial

services that facilitate aggregate economic performance and 

economic growth, such as channeling funds from lenders to 

borrowers; performing central banking functions; underwriting securities issues and/or making markets for securities and 

commodities; and pooling securities, or other assets, on behalf of shareholders or beneficiaries of employee benefit or

other trust funds.

This article describes employment changes between 2001

and 2005 in occupations found primarily in the finance industries and the possible factors contributing to these trends. 

While finance industries added more than 200,000 jobs from

2001 to 2005—an increase of 6.1 percent—the employment

for occupations in these industries changed disproportionately 

and/or in the opposite direction. For example, the number of 

loan officers grew 56 percent during the period, and employment of tellers increased 12.5 percent. On the other han

employment of brokerage clerks and new accounts clerks 

showed declines of 15 and 17 percent, respectively (table1).

The 2005 Occupational Employment Statistics (OES) data

show that more than 80 percent of workers in the occupations

discussed in this article are found in the finance industries.

In recent years, online banks that provide services entirely 

over the Internet have entered the market. The wonders of

modern computer technology have enabled banks to lower 

transactions costs by having the customer interact with an 

electronic banking (e-banking)service, rather than with a person. With the drop in telecommunications costs, banks have 

developed another financial innovation—home banking. It 

now cost-efficient for a bank to set up an electronic banking

facility that links the bank’s customer with the bank’s computer to carry out transactions using either a telephone or a 

personal computer. 

During the 2001-2005 period, low interest rates and greater personal income drove employment gains in some components of the finance industries. Mortgage rates also fell,

leading to a surge in both home purchases and refinancing

activity. 

Finance Industries

The finance industries described in this article, consist of

four 3–digit North American Industry Classification System

(NAICS) subsector industries. Table 2 shows the distribution

of employment across these subsector industries and some 

subgroups for the subsector 522, credit intermediation and

related activities. As this table shows, in 2005, more th

76 percent of employment in the finance industries was concentrated in credit intermediation and related activities. Th

sub-sector industry is composed of three 4-digit industry

groups. Of these, the subgroup depository credit intermediation is the leading industry group, with close to 62 percent of

employment in the credit intermediation and related activities 

group industry. Commercial banking is the largest industry 

within depository credit intermediation, accounting for more 

than 71 percent of that industry group’s 2005 employment

and more than one-third of employment in the finance industries, as a whole.

According to Current Employment Statistics data, employment in finance increased from 3,539,400 in 2001 to

3,756,600 in 2005—an increase of 6.1 percent. This growth

was faster than the overall employment growth of 3.1 percent

for all private-service providing industries. Much of the employment gains came from credit intermediation and relate

activities (NAICS 522). Credit intermediation and related activities involve lending funds or facilitating lending. Mo

mortgage and refinance activity is classified in this industry

group. 

Mergers and Acquisitions

A merger between two firms is an exercise in cost cutting.

Duplicate job positions, departments, and even physical locations may be eliminated, in an effort to cut costs and take 

advantage of economies of scale. The Web and improv

computer technology are major factors driving bank consolidation because large upfront investments are required to set 
69

up many information technology platforms for financial institutions. To take advantage of these economies of scal

banks have gotten bigger, and this development has led to additional consolidation. Information technology has also increased economies of scope—the ability to use one resource

to provide many different products and services. The resu

is that consolidation is taking place not only to make financial institutions larger, but also to increase the combination of 

products and services that financial institutions can provide.

Between 2001 and 2005 there were a total of 2,421 mergers

and acquisitions.1 

In 2001, there were 8,080 banks with 65,564 branches.

By 2005, there were 7,527 banks with 71,716 branches—a

drop of 7 percent for banks and an increase of 9 percent for

branches.2Mergers and acquisitions typically result in a decline in the number of banks and other financial firms. However, this decline is usually consistent with an increase in 

number of branches. Financial firms maintain branches 

obtain a competitive edge, as branches allow firms to provide

a variety of personal services to customers and to maintain 

customer loyalty. Branches generally are located near where 

people live or work, and most consumers use them as the 

primary locations for their financial activities.

Economic developments

The benchmark federal funds rate, which is charged on overnight loans between banks, was 6.5 percent in 2000, at the

peak of the stock-market boom. By early 2001, with sto

prices falling and the economy losing momentum, the Federal Reserve began lowering the federal funds rate. The ra

Table 1. Employment, 2001-2005 

Occupation 2001 2005 Percent change

All occupations ............................................................ 127,980,410 130,307,840 1.8

Business and financial operations occupations........... 4,676,680 5,410,410 15.7

Personal financial advisors .................................... 83,820 108,640 29.6

Loan officers........................................................... 213,450 332,690 55.9

Sales and related occupations .................................... 13,418,240 13,930,320 3.8

Securities, commodities, and financial services

 sales agents......................................................... 270,730 251,710 -7.0

Office and administrative support occupations............ 22,798,590 22,784,330 -0.1

 Bill and account collectors...................................... 385,800 431,280 11.8

 Tellers..................................................................... 532,740 599,220 12.5

 Brokerage clerks .................................................... 82,730 70,110 -15.3

Loan Interviewers and clerks ................................. 157,680 231,700 46.9

New accounts clerks .............................................. 99,760 82,450 -17.4

Source: Occupational Employment Statistics (OES) Survey

Table 2. Employment in the finance industry, 2001-2005

 Percent of Percent

NAICS Industry 2001 2005 employment change

 (2005) 2001-2005

521 Monetary authorities-central bank................... 23,000 20,800 0.6 -9.6

522 Credit intermediation and related activities ..... 2,597,700 2,865,800 76.3 10.3

5221 Depository credit intermediation...................... 1,701,200 1,774,400 61.9 4.3

 52211 Commercial banking ....................................... 1,258,400 1,297,900 73.1 3.1

52212 Saving institutions ........................................... 233,600 239,600 13.5 2.6

 52213; Credit unions and other depository ................. 209,200 236,900 13.4 13.2

 52219 

5222 Nondepository credit intermediation................ 660,700 766,100 26.7 16.0

5223 Activities related to credit intermediation......... 235,700 325,300 11.4 38.0

523 Securities commodity contracts and other 

 financial investments and related activities ... 830,500 783,200 20.8 -5.7

525 Funds, trusts, and other financial vehicles ...... 88,300 86,800 2.3 -1.7

Total finance employment................................ 3,539,400 3,756,600 100.0 6.1

Source: Current Employment Statistics (CES) Survey

1

 Source: SNL Financial

Includes number of announced mergers and acquisitions for securities, 

specialty finance, and banks 2 Source: Federal Deposit Insurance Corporation (FDIC)
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then continued to decline through June 2003, when the federal funds rate reached a 40-year historical low of only 1 percent, and remained at this level until June 2004. After Ju

2004, the federal funds rate underwent a series of 13 successive quarter-point increases, until it reached 4.25 percent by

the end of 2005.

Mortgage rates also followed the declining trend. Historically low mortgage rates led to a substantial surge in both 

first-time mortgage loans and refinancing activity.3Tot

home mortgage loans increased from 1,139 billion dollars, in

2000, to 2,908 billion, in 2005—an increase of 155 percent.

During this same period, first-time mortgage loans increased

67 percent, and refinance mortgage loans increased 497 percent. As a result, credit intermediation and related activities 

added workers to meet the increasing demand for refinancing, and employment in this industry group increased more 

than 10 percent during the same period.

 While employment in credit intermediation and related 

activities increased, employment in securities, commodity contractors, and other financial investments and related

activities declined by 5.7 percent from 2001 to 2005. T

employment change in the securities industry was not evenly 

distributed across years. From 2001 to 2003, employme

dropped by 72,800, or 8.8 percent, and from 2003 to 2005,

employment increased by 25,000. The finance industries

replenished only about one-third of the jobs lost during the

study period.

A combination of factors likely played a role in the stock 

market decline that contributed to large job losses in securities, commodity contractors, and other financial investments

and related activities. These factors include the late 199

bull market run-up in stock prices, leading to fears that stocks

were overpriced. Additionally, the terrorist attacks of September 11, 2001, and several financial scandals led to diminished confidence in the stock market. Finally, low mortga

rates and appreciating property values likely inspired some 

investors to put their funds in real estate.

Technology change 

Financial innovation has transformed the entire financial system and has led to the decline of traditional banking. Advances in technology have had a significant effect on the

mix of occupations in the finance industries. Additionall

electronic banking has reduced the need for some office and

administrative support occupations, such as bookkeeping occupations. On the other hand, demand for computer specialists has grown, as more banks make their services available 

electronically. 

Falling telecommunications costs have spurred the development of another financial innovation, home banking, in

which the bank’s customer is linked with the bank’s computer 

by either telephone or personal computer. With the decline 

in prices of personal computers and their increasing pres3

 Source: SNL Financial LC

4 In 2002, the OES survey switched from the Standard Industrial

Classification (SIC) System to the North American Industrial Classification

System (NAICS). In order to avoid any comparability issues caused by

this conversion, cross-industry employment is used to show the changes in

highly concentrated occupations in the finance industries. Any changes 

these occupations are likely to be relevant to the finance industries.

ence in the home, we have seen a further innovation in the 

home banking area, the appearance of a new type of banking 

institution—the virtual bank—a bank that has no physic

location, but, rather, which exists only in cyberspace. T

virtual bank takes home banking one step further, offering a 

full set of banking services, such as accepting checking and 

saving deposits; selling certificates of deposit (CDs); issuing

ATM cards; and providing bill-paying facilities, available to

customers at home 24 hours a day.

Occupational employment4

The increase in finance employment of more than 200,000, or

6.1 percent, from 2001 to 2005 primarily occurred in depository credit intermediation. In contrast, other components of 

the finance industries lost workers during the same period.

Because staffing patterns differ across components of the finance industries, these varying employment trends resulted in 

changes in occupational composition for finance as a whole.

Data used to analyze employment changes in finance-related occupations are from the Occupational Employment 

Statistics (OES) Survey. The OES Survey categorizes workers into 801 detailed occupations and aggregates these detailed occupations into 22 major occupational groups. The

2005 OES Survey shows that more than 80 percent of employment in the finance industries was concentrated in three

of the major occupational groups: Business and financial operations, sales and related, and office and administrative support occupations. The data and analysis that follow relate to

the detailed occupations in these three groups. 

Table 3. Select major occupational groups in the finance 

industries, 2005

Employment 

finance Percent

industries, distribution

2005

All occupations ................................... 3,733,410 100.0

Business and financial operations.. 759,790 20.4

Sales and related occupations ....... 383,440 10.3

Office and administrative support... 2,033,040 54.5

Remaining (19) groups.................. 557,140 14.9

Source: Occupational Employment Statistics (OES) Survey

Business and financial operations: Business and financi

operations, the second-largest occupational group in the finance industries, accounted for 20 percent of finance employment in 2005. This group consists of workers, such as credit

analysts, accountants and auditors, loan officers, and loan

counselors. One of the detailed occupations in this group, 

loan officers, represented 8.1 percent of finance employment,
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may have prevented a decline in the employment of tellers. 

Because OES survey data do not distinguish between parttime and full-time workers, if a bank eliminated one full-time

teller position and, instead, created two part-time positions,

the bank’s employment of tellers—as measured by the OES

survey—would increase. Data from the National Compensation survey (NCS) show that the number of part-time tellers has increased, from 31.1 percent in 2001, to 34.3 percent in 2005 (table 4). In addition, tellers are more hi

concentrated in branch banks than they were previously, as 

most customers typically use branches for transactions and 

other account activities. The growth in employment of telle

between 2001 and 2005 could, therefore, also have resulted

from the increase in the number of bank branches.

Table 4. Mean weekly hours for full-time and part-time tellers, 

2001-2005

 Percent Percent 

 of tellers of tellers

Full- Part- who who

Year Total time time worked worked

 part- full-

 time(*) time(*)

2001................... 33.9 39.2 21.6 30.1 69.9

2005................... 33.8 39.6 22.7 34.3 65.7

Source: National Compensation Survey (NCS)

* Calculated by the author

With 194,060 people working as loan interviewers and

clerks, this occupation accounted for 5.2 percent of all workers in the finance industries, in 2005. Loan interviewers and

clerks are involved in the processing of loan applications 

and forward their findings, reports, and documents to the appraisal department. A sustained period of historically low 

interest rates and healthy housing markets led to job gains for 

loan interviewers and clerks, as demand for loans increased. 

Cross-industry5 employment of loan interviewers and clerks 

increased from 157,680 in 2001 to 231,700 in 2005—an increase of almost 47 percent.

Two other detailed occupations within the office and

administrative support group are new accounts clerks and 

brokerage clerks, which accounted for 2.1 percent and 1.7

percent of workers in finance, respectively. Between 2001

and 2005, cross-industry employment in these occupations

declined by 17.3 percent and 15.2 percent, respectively.

New account clerks interview prospective customers and 

explain services available at the bank. Increasing automation 

and on-line banking provide the most likely explanation for

the decline in new account clerk employment. Consolidation 

is another likely factor in this employment decline, as simiin 2005. This was the second-largest occupation in the finance industries, after tellers. In 2005, more than 90 perce

of all loan officers were employed in the finance industries.

Employment of loan officers increased by 119,000—or 56

percent—over the 2001-2005 period. Another business a

financial operations detailed occupation, personal financial

advisors, increased by 30 percent during the period under

study.

Employment of loan officers is mainly a function of interest rates. As long as interest rates decline, demand for loans 

increases. The increase in employment of loan officers a

personal financial advisors, therefore, was a result of a sustained period of historically low interest rates and healthy 

housing markets that led to job gains in many industries, including depository and nondepository credit intermediation, 

as demand for loans increased. Because loan officers a

more heavily concentrated in branch banks, the increase in 

numbers of loan officers can also be attributed to growth in

the number of branches.

Sales and related occupations: Sales and related occupations, the third largest occupational group in the finance

industries, accounted for 10 percent of finance industries

employment, in 2005. Securities, commodities, and financial services sales agents, one of the detailed occupations 

in this group, are found primarily in the finance industries.

Approximately 93 percent of securities, commodities, and

financial services sales agents are employed in finance and

make up more than 6 percent of finance industries employment. Employment of this occupation declined from 270,7

to 251,710—a decrease of 7 percent.

Office and administrative support occupations: Office a

administrative support occupations, the largest occupational 

group in the finance industries, made up about 55 percent of

finance employment in 2005. Detailed occupations with

this group with significant shares of finance employment are

tellers, loan interviewers and clerks, new accounts clerks, and 

brokerage clerks. 

Tellers receive and pay out money and keep records of

transactions. Tellers had the largest portion of total finance

employment: 15.6 percent in 2005. Employment of tellers grew from 532,740 in 2001 to 599,220 in 2005—an increase of more than 12 percent. Theoretically, technolog

advancement and automation should have led to a drop in 

demand for tellers, and, therefore, a decrease in the number 

of tellers. However, many of the remaining positions for 

tellers may have been converted from full-time to part-time

positions. This could cost banks less than full-time positions

would cost, because part-time tellers generally receive fewer

benefits than full-time tellers. Shifting tellers from full-ti

to part-time positions also allows banks more flexibility in

extending business hours, since part-time tellers can be

scheduled to work only when customer traffic is high. This

trend toward replacing full-time tellers with part-time tellers

5 Cross-industry estimates are calculated with data collected from

establishments in all the industries in which a particular occupation is 

reported. For example, the cross-industry occupational employment estimate

for tellers is the sum of all the industry-specific estimates for tellers.
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lar departments in different banks were probably centralized 

during mergers and acquisitions. 

Brokerage clerks perform clerical duties involving the 

purchase or sale of securities. Declining employment of brokerage clerks was partly due to technological advances and 

increased computer use. 

The combined effects of technology, deregulation, mergers, and the economic environment that affected the finance

industries during the 2001-2005 period are reflected in employment fluctuations for finance-related occupations. Whi

finance employment increased by 6.1 percent from 2001 to

2005, occupations discussed in this article show disproportionate changes. The increase in employment of some occupations has been offset by the decline in employment o

others. For example, the number of loan officers in the finance industries grew 55.9 percent during the period, whi

securities, commodities, and financial services sales agents

showed a decrease of 7 percent.

Employment and redistribution of occupations in the finance industry are currently at a crucial point. As mergers 

and acquisitions continue to sweep the industry and more advanced technological innovations are introduced to finance

operations, employment could possibly change and the mix 

of occupations could change. Meanwhile—with the passa

of the Gramm-Leach-Bliley Financial Services Modernization Act, which repealed the Glass-Steagall Act;6 and, thus, 

opened up competition among banks, securities companies 

and insurance companies—it is possible that new opportunities in the finance industry will lead to the creation of new

occupations and increased employment. 

Therefore, now is an interesting time for the United States

finance industry. 6 In 1933, in the aftermath of the Great Depression and its widespread

bank failures, Congress enacted the Banking Act of 1933 (Glass-Steagall

Act), which separated the activities of commercial banks from those of the

securities industry. Likewise, this act prohibited investment banks from 

engaging in commercial banking activities.