Shortly after the death of a superficial Bank of America intern in London in 2013, the then M&A analyst at a large investment bank recalled that he had a fight when he left the Canary Wharf Tower at 11pm.
“I smell power,” he said by another veteran banker – it’s free time that can work.
He never reported the incident for fear of retaliation. A few years later, 15 hours a day and seven days a week, a fire broke out in the workplace and he quit. He cited the incident as one of the reasons he would never return.
From seven years Mritz Erhard, 21, dies, Investment banks once again protect the hours they are demanding from young workers, Goldman Sachs analysts made a campaign after getting tired Slide deck Details of the brutal and workplace abuse of the 955-hour week have been further exacerbated by the isolation of homework during the epidemic.
Their protest has captured the consciousness of the moment. A string of banks has since sent memos and published press releases promising to change the way employees work. But what will be different this time?
Senior executives obviously feel pressured to do something or at least say something. Goldman’s chief executive, David Solomon, Came out Dissatisfied analysts pledged support and more humanitarian hours. Citigroup chief Jane Fraser sent staff A memo calling for a “reset” of work lifeIncluding video call limits and flexible work arrangements after the epidemic is over.
Other banks are giving park and bump to junior staff: J.Effects offered by providing Pelton exercise bikes; Credit Suisse is offering a $ 20,000 bonus to junior bankers. Several banks have said they plan to hire more staff to shift the burden on existing staff.
Sarah Watchter, head of Citigroup’s human resources department, told the Financial Times that “everything is overblown and difficult at the moment,” although the bank has been thinking about how to give its employees a better work-life balance long before Fraser’s memo. He cited an agency-wide holiday earlier last year and to be repeated this year. “We looked closely at working hours, we wanted to make sure that people who worked too hard didn’t have pockets. It’s something that is very sensitive to management. ”
Either way, the way decent work is done throughout the industry is now the subject of widespread debate. Morgan Stanley’s early career analyst said the Goldman presentation was a debate over whether “all his colleagues” should have protested on their behalf, or whether they had signed up for well-paid but hard work.
“On the one hand I signed up as an investment banking analyst, I knew I was working extremely hard, I knew people would be rude at times. But on the other hand we are asking ourselves whether the reality has exceeded our expectations. “
A former Goldman banking analyst, who left two years later, said opinions were divided among his friends. “The senior boys’ point of view is to keep quiet or take care of the little ones while managing the workload of the children. The mentality of ‘we were all there’ is the opposite. What he did was Cameraddy.
Many first-year analysts have never seen their coworker or boss without a screen. An analyst at Boutique Investment Bank said: “I need to contact my VP whenever I have to go for a walk or take a break.” Everyone is regularly afraid of being monitored. “Virtual leaks,” he said.
This has been a particularly busy year for dealmaking and, above all, the achievement of special purpose has surprised many banks. Specs that raise cash in the stock market and then search for a company to go public are suddenly red-hot, with more than 500 launches in the last 12 months. “The spec thing has just taken our lives,” said one young banker at the giant investment bank.
Industry has also changed. In 1994, Brian Mullen, then managing director of boutique investment banks Donaldson, Lufkin and Generate, wrote a famous memo in response to allegations that employees were too busy. “Let’s define‘ busyness ’. You are busy ” [if] You work at least 16 hours a day every week and at least 16 hours on the weekends, “he wrote.” If it’s not your time in the office, it gives you the ability to work more. “
Now he has taken a different approach, Wrote that although he never regretted the message, “in the 1980s [and] In the ’90s, the investment banking industry was growing at a rate of 20 percent a year and margins were high enough. . . Margins have declined as growth has increased, and the cost of winning business is growing more about voting rights than individuals. “Given the declining opportunities in the industry, asking too much will only dismiss employees,” he said.
A veteran banker noted that other industries such as technology and private equity now pay graduates the same kind of salary but with a better standard of living. “Investment banks can no longer use witchcraft, say ‘if you have to pay, you have to suck’ – it’s not as sexy as any other industry.”
Despite the change in attitudes, many in the industry sneer at the possibility of significant change. Standing in the way is peer pressure and the middle management involved that has a greater impact on the careers of young bankers than well-intentioned employees.
“We all get nervous when we fight, we have occupational health programs [but] “If you go together, the bank could legally stop you from coming to work, which we fear will happen, because it will stop our careers and let our colleagues know we can’t handle it,” said an executive director of Global Bank in what he called recent memos. And press releases have repeated the “cheerful” of the 2013 Zero Speech.
The camouflage can be invigorating. Deniz Okat and Elapuli Basudevan, two academics, have studied its effects Not Saturday’s executive Founded by Investment Bank after Erhard’s death. They looked at data on millions of taxi rides between New York City’s 10 investment bank headquarters and residential neighborhoods, and they found that Saturday rides decreased, with other nights driving significantly higher late at night. “The policy was supported by persuading bankers to work longer hours in non-secure days,” they concluded.
Changing incentives was key, multiple bankers said. “Bankers and businessmen are motivated by money,” said one veteran businessman. “I’ve seen in the past that some banks give middle management prudent bonuses based on retaining grades, and this seems to be the only way to force change.” He noted that it was more of an incentive for desk heads and other members of middle management than senior executives.
Client incentives are also important. Banks accept flat deal fees instead of hourly hours, keeping junior bankers virtually effective. “Bankers are seen as an unlimited asset for free,” said a former banker who now works for the corporate. “Everyone said: Bankers don’t add any value so let’s take advantage of them.”
Mel Newton, a consultant at KPMG’s financial services staff, thinks that working for young bankers over a long period of time is a weak strategy to maximize productivity. He acknowledged that there was a “supply-demand imbalance” where a lot of young analysts stood up for the job, so they were tempted to work hard. But “are these really productive between seven and midnight? I doubt it, and of course after three or four days they probably won’t be able to do well. ”
The solution, he argued, was “to educate senior management about what drives productivity in their workplace: is it long-term, or happy employees? You’re going to learn a lot more from a group of people who work, love the organization and value it.” “Customers are claiming, but it is up to the banks to set this limit,” he said.
The former banker, who rushed to leave at 11pm, recalled, “A huge amount of work that I did could be done. The work was meaningless. The best bankers are two pages or a presentation.” They don’t come because they know what they are talking about. ‘
Many of the bankers who spoke at FT, however, had a positive attraction to the industry in their early days. The former Goldman analyst said: “Which analysts join Goldman or Evercore? They are all alpha. They have done well in everything they have done. I don’t want to work less. I wanted responsibility. This is the scene where you hired double analysts and they do half the work? I don’t want to work in this environment. ”
Additional reports from One Walker and Francesca on Friday