The past year has seen a sea change on Wall Street: Investment bankers are being told to work less.
Goldman Sachs (GS) was first out of the gate, telling its junior bankers to take Saturdays off and restricting analysts from going to the office or logging in to company systems from 9 p.m. Fridays to 9 a.m. Sunday.
J.P. Morgan (JPM) and Bank of America (BAC) quickly followed suit, respectively giving junior bankers one "protected weekend" a month and telling junior employees to take off four weekend days per month.
The tragic death of a 21-year old Bank of America intern last summer brought harsh media scrutiny on Wall Street and helped put pressure on the big firms to ease up on a industry so hard-driving and "Type A." Young investment bankers are famous for working extremely long hours, including weekends and holidays; for many junior people in the industry, their first (often only) day off is their wedding day.
True to form in an industry known for celebrating conspicuous consumption, there's more than just good PR or care about employees' welfare behind the moves, according to New York Magazine writer Kevin Roose, author of Young Money: Insider the Hidden World of Wall Street's Post-Crash Recruits.
Investment banks "have a major problem: Young people are not sticking around," Roose says. "They're having retention and recruiting problems [and] they needed to do something."
In his book, Roose notes 36% of the 2010 graduating class at Princeton with full-time jobs at graduation went into finance, down from 46% in 2006, before the crisis.
"For many years people [from elite universities] chose Wall Street because it was the obvious thing to do: it paid a lot of money and was prestigious," he says. But Silicon Valley startups are now viewed as the preferred path for young grads from America's top schools as Wall Street's reputation has taken a big hit.
Money is another big reason young bankers aren't sticking. Traditionally, investment banking was like pledging a fraternity: After being "hazed" for two to three years, those who could take 100-hour workweeks, maniacal bosses and needy clients (along with hard partying, little sleep, exercise or socializing outside work) got "initiated" into the much more comfortable world of senior bankers. The hours are still long but there's much less grunt work and much higher compensation.
But since the 2008 crisis, "the bargain has changed," according to Roose, who notes the industry has suffered several rounds of layoffs and a very different pay structure. "Now the ladder has broken down. You're pledging but you're not even sure they'll make you a full member."
So what does Roose recommend for young people thinking about going into investment banking today? Watch the accompanying video to find out.
- Wall Street
- Bank of America
- Investment bankers