Investment banks are facing a fresh retention crisis in their junior ranks as the sector battles renewed scrutiny of brutal working hours. Most junior dealmakers are regularly clocking weekly working hours of more than 80 hours. Now more than 70pc of over a hundred junior bankers, analysts and associates polled have said they are likely to quit their jobs.
The highest proportion of respondents (27pc) said they were very likely to quit their current roles, while 25pc said they were likely to move on and 19pc were somewhat likely to make a switch. Just 18pc said they were unlikely to leave their current employers.
These stats come as work-life balance in the banking sector has been thrust into the spotlight once again. The untimely death of Bank of America associate, 35-year-old Leo Lukenas, who passed away from acute coronary artery thrombus on 2 May, has prompted a fresh round of checks on working conditions.
Lukenas died of natural causes. However, social media and specialist forums have seen a surge in posts from disgruntled junior bankers about extreme hours and their harmful effects on mental and physical health. The financial institutions banker worked on the UMB Financial and Heartland Financial deal announced on 29 April – three days before his death.
Junior bankers have said that morale is low as banks largely deserted restrictions put in place to limit brutal hours after the death of Bank of America intern Moritz Erhardt more than a decade ago.
“In the long term, it’s all about the exit options,” said one junior at a bulge bracket bank. “Personally, I won’t be doing this for many more years and this is increasingly the common view among my peers.” A survey suggested that 30pc of juniors were clocking more than 80 hours a week, even amid the deal slump of the past two years that has prompted banks to cut thousands of roles.
In 2021, banks stemmed a rebellion in the junior ranks in response to a leaked PowerPoint presentation by a group of Goldman Sachs analysts that outlined declining mental and physical health as they worked consecutive 100-hour weeks. They did this largely through handing out 30pc salary increases rather than significantly changing working conditions.
Of those juniors looking to switch jobs, 44pc still said they would move to another bank, while 39pc intend to switch into private equity. Just 12pc said they would quit the financial sector entirely.
Juniors have been hit by lay-offs as investment banks stripped out thousands of jobs last year amid an ongoing deal drought. The highest proportion of respondents to survey (20pc) voted eight on a 10-point scale when asked how concerned they were about job security, while 61pc said job cuts had hit the junior ranks at their employer over the past year.
While banks maintain existing policies on work-life balance, these are overseen by managing directors running the teams, who have little accountability for flouting the rules, they said.
Alexandra Michel, a former Goldman Sachs banker turned academic at the University of Pennsylvania, has conducted extensive research into investment banks working culture and the detrimental effects long hours have.
“People choose banking not for its own sake, but because of the options it gives them in the future,” she said. “Many young people who enter as analysts do not even know what the job consists of. They are seduced by ‘we only choose the best and the brightest’”.
She added: “People think that they can simply endure the harsh work for a few years while they are young and therefore do not weigh the attractiveness of the job conditions sufficiently.” (The writer is our foreign correspondent based in the UK)
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