Last month, a group of 13 U.S. first year investment banking analysts at Goldman Sachs presented a slide deck to management illustrating arduous working conditions.
Formatted as though it was an official Goldman presentation, the deck began to circulate on social media on 17 March.
What The Deck Reveals:
Based on a survey of the 13 analysts, the deck reported a burdensome average work week of 95 hours, with five hours of sleep per night starting at 3am. The respondents agreed that this was taking a toll on both their physical and mental health.
“There was a point where I was not eating, showering or doing anything else other than working from morning until after midnight,” one analyst said.
Others revealed that they “can’t sleep anymore because [their] anxiety levels are through the roof”, and “being unemployed is less frightening to [them] than what [their] body might succumb to if [they] keep up this lifestyle”.
A staggering 100% of respondents said that their hours had hurt their relationships with friends and family.
Apart from the long hours, the deck also detailed the harsh treatment that was propagated by senior bankers, with the effects being that three-quarters of respondents reported that they felt they had been “victims of workplace abuse”.
The majority of them reported being blamed without justification, as well as “excessive monitoring or micromanagement”.
Virtually all of them stated they felt pressure from “unrealistic deadlines” and have been shunned or ignored in meetings.
Conclusions and Suggestions
Overall, the analysts have described their experience as “inhumane”, with one even saying that they have “been through foster care and this is arguably worse.”
On a scale of 1-10, respondents ranked their satisfaction with the job and the firm at two on average.
They concluded their presentation by proposing several solutions to the management team, including capping the work week at 80 hours, scheduling client meetings to provide a week of preparation time, and respecting the company’s policy that junior bankers should not work from Friday at 9pm until Sunday morning.
The presentation also exposed broader industry practices within the world of investment banking.
This issue is certainly not isolated to Goldman Sachs, with complaints about damagingly long-working hours having also been launched at companies such as Black Rock.
Few people entering the cutthroat world of Wall Street banking would expect a tidy nine-to-five. Young investment banking recruits are often expected to work very long hours in exchange for higher than average salaries and the prospect of promotion.
These unhealthy work pressures have led to several tragic events.
In 2013, banks in the City of London faced calls to overhaul the working culture for younger staff following the death of a 21 year old intern at Bank of America. In 2015, a 22 year old Goldman analyst, Sarvshreshth Gupta, took his own life after complaining of working 100 hours a week and working all night.
These examples make the laid back money-making image that Wall Street banks have cultivated in recent years appear ironic.
Faced with increasing competition for talent from the jeans and hoodie crowd of Silicon Valley, big banks have loosened their formal suit and tie dress codes and expanded family leave policies.
In particular, Goldman has also sought to protect junior bankers’ weekends with the “Saturday rule” that mandates analysts be out of the office from 9 pm on Friday to 9 am on Sunday, except in rare circumstances. According to analysts in the survey, however, this rule is not always respected.
Covid-19 as a Catalyst
Remote working during the pandemic has made the current situation worse by further blurring the lines between the office and home.
In fact, nearly 90% of all workers today say their work-life balance is getting worse, according to a recent survey published by the Harvard Business Review of 1,500 people across 46 countries.
As for Goldman, situations are particularly bad as “business is strong and volumes are at historic levels” due to the pandemic.
Buoyed by strong equity and debt underwriting, Goldman’s investment banking business generated a record high $9.42 billion in 2020.
Goldman and other Wall Street banks have also played a central role in a recent frenzy of special purpose acquisition company, or SPAC, deals.
These shell companies raise funds through an initial public offering with a view to later buying assets. This year, such “blank-cheque” IPOs have already surpassed the $83.4 billion the sector raised in all of 2020, according to Chicago based SPAC Research.
Response from Banks
In a statement, Goldman has declared that they “recognise that [their] people are very busy”, and that “a year into Covid, people are understandably quite stretched.”
They insisted that this is the reason “why [they] are listening to their concerns and taking multiple steps to address them.” They also reaffirmed that “no one has been in trouble.”
In particular, Goldman’s CEO David Solomon said “it’s great that this group of young analysts went to their management, we want a workplace where people can share concerns freely…” But he added that going the so-called “extra mile” can make a big difference for the bank.
He expects Goldman to continue to face high demand from clients and emphasised the need to meet the challenge, saying that hard work brought rewards.
“Just remember: if we all go an extra mile for our client, even when we feel that we’re reaching our limit, it can really make a difference in our performance” he said.
He emphasised that the issue is “something that [he] and the leadership team take very seriously,” and subsequently promised to improve working conditions at the firm.
In particular, he said they are “accelerating efforts to hire new junior bankers across investment banking and internally transferring bankers to business lines where activity levels are highest.”
The firm is also “being more selective about business opportunities that [they] pursue, and [are] working to automate certain tasks in [their] business.”
Finally, he pledged to “enforce its ‘Saturday rule’ to ring-fence junior bankers’ time off from Friday evening into Sunday morning”.
Outside of Goldman, the fourth largest bank in the U.S. — Citi’s new CEO Jane Fraser recently sent a memo designating Zoom free Fridays and reminding staff to try to schedule calls within traditional working hours.
She also added a company-wide holiday at the end of May, citing “the need for a reset”. She said that the relentlessness of the pandemic workday is “simply not sustainable”, “can prevent [everyone] from recharging fully”, “and that [is not] good for [staff] nor, ultimately, for Citi.”
She also told staff to speak up if they ‘’need more time for a reset. It’s not a sign of weakness; we are all feeling the weariness”.
This is no doubt a clear example of genuine effort to protect employee welfare within the finance industry, and as such it is an example for Goldman to follow.