Rooms at the Fairmont Royal Pavilion, perched on the platinum beaches of Barbados, can run north of $1,000 a night. Catch the catamaran snorkel cruise in the morning; be back ashore in time for the royal afternoon tea.
For some employees of Houlihan Lokey Inc., an offer is now on the table: A five-night stay at this Caribbean retreat, on the investment bank’s dime — a reward after a year of record profits. It also represents a silent plea to the company’s junior employees: Please don’t quit.
That same prayer is echoing all around Wall Street, where rates of turnover and burnout among young workers are accelerating. Banks have tried to turn the tide with raises, bonuses, vacations and even free Pelotons. All that means it’s never been more lucrative to be a young banker in the U.S.
The problem though is that it’s also never been more lucrative for aspirants to work outside the gilded world of finance. And the gap between banks and other employers like technology firms has narrowed.
“Is it the best time to be a banker in terms of making money? Sure,” says executive recruiter Dan Miller of True Search. “Is it a horrible time in terms of lifestyle? Absolutely.”
Wall Street Pays Up
Firms are increasing salaries or offering perks to employees
Source: Bloomberg
A presentation prepared by 13 first-year analysts at Goldman Sachs Group Inc. earlier this year drove a reckoning across Wall Street after it shone a spotlight on the working conditions for junior bankers — some of them were toiling hundred hours a week while their physical and mental health suffered. Goldman responded by easing up on weekend hours and pledging to increase staff in its most-active businesses.
Yet some industry veterans have harsh words for those complaining about the workload. Cantor Fitzgerald’s Howard Lutnick has suggested some of the young workers who consider leaving finance might simply not be cut out for it. “Young bankers who decide they’re working too hard — choose another living,” he told Bloomberg TV earlier this month.
And bank analysts’ grueling workloads have remained, and in some cases gotten worse. As Covid-19 took hold of the nation last year, the mantra of “work hard, play hard” turned into “work hard, sit on your couch,” all while the economy ran hot and deals proliferated.
Frustrated and overworked, many of them turned to the anonymous ex-banker behind the popular finance-meme account “Litquidity” for support. In an interview, he said he was flooded with messages on Twitter and Instagram from young industry colleagues who were fed up and weighing whether the job was worth it.
Lit, as he calls himself, was at the time a senior associate in investment banking and knew all too well what they were going through. He, too, felt exhausted and stressed, and at one point went to see a doctor to check up concerning heart palpitations.
“You know the feeling when your stomach just sinks? I felt that in my heart,” he said by phone from New York’s Central Park. It’s probably stress-related, his doctor concluded. This past winter, Lit quit his job to focus on growing on the Litquidity brand and penning a daily newsletter. He says he's also working to launch a venture capital fund.
It’s not just in finance that workers are becoming more demanding — a similar scenario playing out nationwide. Businesses from McDonald’s Corp. to country clubs in Nashville, Tennessee, have raised wages and offered hiring bonuses to lure new workers. From March to May, the rate of U.S. workers voluntarily quitting their jobs rose to its highest level in at least two decades. In Washington, lawmakers are sparring over raising the minimum wage to $15 an hour.
Of course, the insulated world of finance and some other professional services operate on a significantly higher plane in terms of pay. Last month dozens of the country’s top law firms raised first-year wages to $202,500, give or take a couple of thousand. They’re also offering multiple annual bonuses and extra time off as they fight to retain talent and their workers face burnout.
The new six-figure salaries for first-year analysts at Citigroup Inc., JPMorgan Chase & Co. and others are close to double the estimated national average wage. BlackRock Inc., the world’s largest asset manager, joined the war for workers by announcing an 8% blanket raise for employees.
Miller, who co-heads True Search’s financial services practice, says young bankers today have far more options than prior cohorts of analysts. Banks and consulting firms have long been a hiring source for private equity and, more recently, venture capital, tech and fintech. These days, with many of those industries hiring at record pace, many young bankers no longer have to stick it out for two years. They can depart early — or skip the sojourn in finance altogether.
Some bank chiefs have promised to ease the pressure. After the presentation by junior analysts, Goldman Chief Executive Officer David Solomon vowed to better enforce the rule that they should get Saturdays off. But sentiments carved into banking culture over decades don’t change easily. Lit pointed out that Goldman’s no-work-on-Saturdays policy has been in place since 2013.
“There has to be a way to get it to stick,” he said. “What good is making half a million if you’re working 20 hours a day?”
Of course, hardly all tech firms are filled with the stereotypical hoodie-wearing, sneaker-clad youngsters tapping away on laptops while curled up on bean bags, taking the occasional sip of Kombucha before jaunting off for a nap in sleep pods. But the broad strokes — a more relaxed office culture, more expansive remote-work options and better work-life balance — hold true, recruiters say.
And in recent years, as equity markets have boomed, it’s clear that tech can be an even faster path to both financial security and unfathomable wealth.
Kim Freehill, a managing director at financial services search firm FSJ Partners, said in an interview that hiring in fintech is so intense that some of her financial services clients are struggling to find available candidates for equity research jobs focused on that sector.
Lazard Ltd. CEO Peter Orszag seems to grasp the reality facing Wall Street: “It’s always going to be the case that investment banking involves hard work,” he told Bloomberg on July 1. But, he added, “it needs to be interesting hard work.”
— With assistance by Mary Biekert
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