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10/29/13

Anyone read this article in the WSJ (Goldman Seeks to Improve Working Conditions for Junior Staffers)?

Any thoughts about whether this is some bad PR-crap claiming that analists will work less hours but in reality will still work 100 hours a week or is this sincere? Also, is only Goldman looking to change working conditions or does this apply to more IB's? It seems kinda hard to image that analysts would now all of a sudden have a lot of free weekends.


Goldman Seeks to Improve Working Conditions for Junior Staffers
Program Seeks to Cut Weekend Work, Streamline Functions

Maybe you don't have to work seven days a week to succeed at Goldman Sachs Group Inc. GS -0.39%

The New York banking company said it has spent the past year working to improve the work-life balance of most-junior employees, known on Wall Street as analysts, by reducing their hours and other measures.

The moves come as banks across the industry struggle to keep young workers who increasingly are favoring the better hours at hedge funds and private-equity firms and the lavish perks at technology startups over Wall Street's grinding analyst programs.

"Banks over the last couple of years, especially the [biggest], are frustrated that they cannot retain people," said Matan Feldman, founder and managing partner of Wall Street Prep Inc., a training program for investment bankers.


Goldman long has been viewed as a fast track to wealth and a wellspring of talent. Some of its top executives began their careers in its much-copied analyst program, which started in 1982. Since then, the programs have become synonymous with grueling work loads, late nights and depressingly frequent orders for takeout food.

But earlier this year, Goldman formed a task force made up of senior staff from different businesses within the firm to improve quality of life and promote career-development opportunities for junior employees. It has implemented the task force's suggestions.

This isn't the first time banks have faced a war for talent. In the dot-com boom in the early 2000s, college graduates increasingly turned to technology jobs over investment banking. Banks pumped up their salaries and made lifestyle concessions, such as free dinners and car service home, for analysts staying late.

But this time banks, which are under public and regulatory pressure to keep pay down, can't merely boost compensation to lure young people.

One of Goldman's goals is to find ways to help young employees finish their work during the regular five-day workweek and avoid all-nighters. Weekend work should be reserved for "critical client activity," the task force found.

For example, when a more-senior analyst commissions a client presentation, the task force has advised asking for a short outline rather than a full presentation that could run 100 pages or more.

Goldman also created new technology that makes it easier for senior bankers to let analysts know what kind of information they need. In an attempt to minimize email traffic, the technology lets senior bankers input specific requests through a portal that can be accessed by the analyst anywhere. This allows senior bankers to be more explicit in their requests, ensuring the junior analysts have a shot at getting the information right the first time, a Goldman spokesman said.

The task force came on the heels of Goldman's decision last year to do away with the two-year contracts for most analysts hired out of college. Instead, the firm said it would hire recent college graduates as full-time employees.

Goldman hired 332 analysts to begin work in 2014, up 14% from 2013, the spokesman said. He added that the firm is betting that hiring more analysts will spread the work among a wider group of people.

"The goal is for our analysts to want to be here for a career," said David Solomon, co-head of Goldman's investment-banking division. "We want them to be challenged, but also to operate at a pace where they're going to stay here and learn important skills that are going to stick."

Goldman Chairman and Chief Executive Lloyd Blankfein told a group of departing summer interns during a question-and-answer session this month that they would do well to "lighten up," according to a video on its website. "People at the age of the people in this room could also relax a little bit, too," he said.

Scott Rostan, founder and CEO of industry-training firm Training The Street Inc., said that unlike in the 1990s, when Wall Street analysts rarely quit their posts, junior staffers today are far less likely to finish their full two-year terms. He said some banks are seeing between 60% and 80% of analysts bolt before their two years are up.

"Lifestyle is very important, especially for millennials now," said Mr. Rostan. "Behind the scenes, [banks] are all somewhat on different levels how we retain our talent. They're not sure how to do it because the common lever in the past was pay, but they can't do that."

Comments (140)

In reply to bschoolhopeful
Best Response
10/29/13

bschoolhopeful:

Waiting for @APAE to eloquently chime in on this one. Surely he'll mention the Saturday blackout period as evidence of this reduced weekend work policy and go on to say that it just means your weekdays are more fucked.

Classic.

Yes, the 36-hour protected window is a thing. Originally exclusive to Healthcare, it has recently been adopted by CRG as well. It isn't division-wide yet (nor will it ever likely be). I wouldn't say that it automatically correlates to your weekdays being worse, if I insinuated that somewhere else then I apologize.

Per the comments regarding class size, 150 would be a fair number to ballpark it for the IBD analyst class each year. I think 135 is a closer number. I would be surprised if it were 332 analysts (undergrad hires) across the whole firm in New York, but that's the only way I can see that number working.

I do believe that there is an undeniable correlation between compensation and retention. Bitch all you will, at the junior level too many people care exclusively about how much they get paid. People don't have the mentality of "I'll start here, cut my teeth, and position myself for where I want to be down the road," it's more of a "fuck you, pay me, pay me, PAY ME" mentality.

As a result, they sacrifice health, relationships, sleep, and sanity for work ... because they expect it to show up at the end of the year. It's lamentable, because at most it makes a difference of $3-5k post-tax. The threshold between middle-bucket and bottom-bucket analyst is really hard to cross. The threshold to be top-bucket is as well. Killing yourself for the bonus is like wearing a backpack full of bricks while treading water for an hour; the task itself is already hard enough without the self-imposed burden.

If people really cared about their quality of life, they'd push back. That's not to say that they don't care about quality of life. The proof is in the pudding, however; they care more about the money than anything, and we see the results.

On top of that, there's the classic 'red badge of courage' syndrome where people will sadomasochistically tilt their work-life balance unnecessarily. You wouldn't believe it, but there are people there too early and too late for no reason. On top of that, everyone will inflate their hours when bitching to their friends from college over drinks at the bar. 85 hours that week somehow becomes 100; everyone has to see how big your dick is because 'oh my God, Brian's getting killed at work, what a stud' somehow makes sense.

Long story short, the nature of the job isn't going to change any time soon, nor is basic human nature (avarice, greed, and materialism). Hours aren't likely to improve materially. The smart guys will continue to get their work done promptly and properly and get the fuck out of the office.

Most people do things to add days to their life. I do things to add life to my days.

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10/29/13

332 analysts? Is that IBD in NY?

10/29/13

I'm confused about the notion of cutting or limiting weekend work. I suppose by shortening the size of decks in theory less time would be spent, but at the end of the day if client asks during Friday afternoon call for x,y, and z by Monday morning call, then weekend work is just inevitable. Weekend work is imposed on analysts by the clients (who know that they will put in 25 hrs over a weekend to get it finished) rather than internally by senior people who are disorganized/incompetent (though this can happen as well). Sure, there might be ways to cut some (read less than 10%) of weekend work through processes discussed above, but as long as the client mindset is that of "if I give them a demand and a deadline they will meet it," the lifestyle isn't going to change much. If you want to boost analyst lifestyle/more eliminate weekday face-time. Of course, a lot of this is perpetuated by the analysts themselves, so would be a difficult thing to remove. The best groups (in my mind) are groups where, if you finish your work by 8pm, you go home and nobody is bothered by it because they know that you'll undoubtedly be there sometime later in the week until 2am.

10/29/13

IB at GS (or any other bank) is not becoming a M-F job. Not unless analysts start working near 20 hours a day, and even then they'd probably still have to do some work on weekends- as an above poster said, it's about the deadlines in large part.

10/29/13

I don't buy it for a minute.

GS has always been claiming that they are trying to make life better for the IBD analysts and cutting hours. OK, they weren't claiming this in 2008, but they've been claiming this since at least '09 and '10- since they've cut analyst pay. Fool us once, shame on you. Fool us twice, shame on us. Fool us three or four times, we're stupid college students.

I've never heard any of these cuts in schedules or hours materializing.

I think the GS IBD job is about as miserable as it's always been. I've talked with a lot of rank and file people who've worked there.

I think college students are relatively easy to mislead.

I think this stuff catches up with you eventually. But it's up to us; our communication process, and our decision-making process- to make sure it catches up with GS rather than us getting burnt.

I think that if I meet a GS summer intern who says GS has actually cut hours- that he and other analysts are working 80 hours/week, I will change my tune. Actually, if I find any BB bank where rank-and-file IBD employees who work there claim they never pull more than 70-80 hours/week for more than a couple weeks/year, I will become a big cheerleader for said bank's IBD department.

I don't think that's going to happen at GS when their SALES AND TRADING employees are largely working 80 hour weeks.

GS is a very smart bank. They are also a somewhat cynical bank (admittedly, like most banks). They know they have you sold on working there, because they generally do have slightly smarter people than just about every other firm (yes, there are many exceptions on a group by group basis) They have you sold on the fact that people who go to GS tend to earn more money over the course of a career (even though there is a GS discount for analysts). They don't have you sold on the fact that you won't wind up in some sort of horror story about pulling 100 hour weeks. So every year, they run this marketing campaign about how senior execs are trying to find ways to cut back analysts' 100 hour/week schedules. These claimed schedule reductions never materialize, and then you get screwed on bonus to boot, because you work for GS and take the GS discount.

Pro tip: ignore the GS marketing campaign and go work for JPM. (I have never worked for JPM. I don't have any sort of stake in JPM's success. I don't even own their stock. I do know that they are probably the fairest and least cynical of all of the top ~3-5 banks) Believe them when they tell you that you are working a 90 hour week, that there will be some misery as an analyst. At least it's not some 100 hour bait and switch. Suck it up, this is what you signed up for- if you don't like it, you can always get a master's degree and become a quant and earn 40% less for 40% less time. Once you've made VP or MD and have become cynical, THEN leave for GS and promise undergrads (suckers) 75 hour weeks and $160K first year comp.

Every year, GS rolls out the same (predictable) "life is getting easier for analysts" marketing campaign. Every year over the past couple, it's never materialized.

10/29/13

Waiting for @APAE to eloquently chime in on this one. Surely he'll mention the Saturday blackout period as evidence of this reduced weekend work policy and go on to say that it just means your weekdays are more fucked.

10/29/13

Also, it's spelled ANALYSTS. Freudian slip?

In reply to bschoolhopeful
10/29/13

bschoolhopeful:

Also, it's spelled ANALYSTS. Freudian slip?

I changed it. My sincerest apologies.

In reply to IlliniProgrammer
10/29/13

IlliniProgrammer:

I don't buy it for a minute.

GS has always been claiming that they are trying to make life better for the IBD analysts and cutting hours. OK, they weren't claiming this in 2008, but they've been claiming this since at least '09 and '10- since they've cut analyst pay. Fool us once, shame on you. Fool us twice, shame on us. Fool us three or four times, we're stupid college students.

I've never heard any of these cuts in schedules or hours materializing.

I think the GS IBD job is about as miserable as it's always been. I've talked with a lot of rank and file people who've worked there.

I think college students are relatively easy to mislead.

I think this stuff catches up with you eventually. But it's up to us; our communication process, and our decision-making process- to make sure it catches up with GS rather than us getting burnt.

I think that if I meet a GS summer intern who says GS has actually cut hours- that he and other analysts are working 80 hours/week, I will change my tune. Actually, if I find any BB bank where rank-and-file IBD employees who work there claim they never pull more than 70-80 hours/week for more than a couple weeks/year, I will become a big cheerleader for said bank's IBD department.

I don't think that's going to happen at GS when their SALES AND TRADING employees are largely working 80 hour weeks.

GS is a very smart bank. They are also a somewhat cynical bank (admittedly, like most banks). They know they have you sold on working there, because they generally do have slightly smarter people than just about every other firm (yes, there are many exceptions on a group by group basis) They have you sold on the fact that people who go to GS tend to earn more money over the course of a career (even though there is a GS discount for analysts). They don't have you sold on the fact that you won't wind up in some sort of horror story about pulling 100 hour weeks. So every year, they run this marketing campaign about how senior execs are trying to find ways to cut back analysts' 100 hour/week schedules. These claimed schedule reductions never materialize, and then you get screwed on bonus to boot, because you work for GS and take the GS discount.

Pro tip: ignore the GS marketing campaign and go work for JPM. (I have never worked for JPM. I don't have any sort of stake in JPM's success. I don't even own their stock. I do know that they are probably the fairest and least cynical of all of the top ~3-5 banks) Believe them when they tell you that you are working a 90 hour week, that there will be some misery as an analyst. At least it's not some 100 hour bait and switch. Suck it up, this is what you signed up for- if you don't like it, you can always get a master's degree and become a quant and earn 40% less for 40% less time. Once you've made VP or MD and have become cynical, THEN leave for GS and promise undergrads (suckers) 75 hour weeks and $160K first year comp.

Every year, GS rolls out the same (predictable) "life is getting easier for analysts" marketing campaign. Every year over the past couple, it's never materialized.

Great post, thanks. I was already somewhat sceptical about this, considering that it seems unlikely that Goldman will start telling their clients that they'll just have to wait a few days longer because the analysts are enjoying their weekends.

10/29/13

BAML should probably run one of these, per the death of an intern.

In reply to HNEP
10/29/13

They squashed that story really quickly. No pitchforks at all. Props to their PR team.

10/29/13

Did 70-80 hour weeks as a SA in S&T this summer, not buying into this whatsoever.

In reply to orangebull
10/29/13

orangebull:

332 analysts? Is that IBD in NY?


How big do you think the company is? They only hire like 50 each year for NYC IBD.
In reply to BTbanker
10/29/13

BTbanker:

orangebull:

332 analysts? Is that IBD in NY?

How big do you think the company is? They only hire like 50 each year for NYC IBD.

This is just blatantly incorrect

10/29/13
10/29/13

They have the 'critical client' escape clause, which means this is all a bunch of BS

The only way this works is if all the MDs in a particular group go out of their way to respect it. I have seen this work and I have seen this not work. In smaller groups, particularly those in regional offices, it is possible to keep this under control. The reason being that their are fewer MDs to pile on 'critical client' qualifying work. In larger groups, this is almost impossible to police unless the group head is really serious about it. 'Problem Child' senior bankers will not respect it unless they are actively brought in line by the group head.

In reply to Edmundo Braverman
10/29/13

Edmundo Braverman:

Get ready for the pay cuts.

This was the first thought that crossed my mind.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

In reply to BTbanker
10/29/13

BTbanker:

orangebull:

332 analysts? Is that IBD in NY?

How big do you think the company is? They only hire like 50 each year for NYC IBD.

you must be fucking retarded

10/29/13

They are on a PR binge. They've been giving out huge charity donations (see Dealbook), and now they are improving analyst conditions except for "critical clients" (Who isn't critical at GS?). These are both very marketable developments.

Still, this might give analysts a free weekend once in awhile. Pretty neat.

10/29/13
In reply to Edmundo Braverman
10/29/13

By overhiring, Goldman is diluting pay and exit opportunities, the very reason people go work for them...

In reply to Whiskey5
10/29/13

you're right, they hired 332 IBD analysts for 1 office last year.

10/29/13

I think the honest to god solution here would be that an MD must be present in the office while analysts are working on his project. If it's that critical of a client, the MD needs to pull an all-nighter too.

Oh well, when I see GS analysts with the time to post rebuttals to me, I will start to believe GS. However, I have a feeling this is part of their annual marketing campaign to get FT hires to sign.

10/29/13

Heard they were piloting this a while back, obviously depends on group culture more than anything. Little late for FT recruiting PR though, as the top / sweatshop groups where it would matter have been full for a bit now.

10/29/13

holy cow! GS brand AND reasonable hours? Sounds too good to be...oh.

In reply to BTbanker
10/29/13

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10/29/13

There is absolutely no way they hired 332 ibd analysts for one office. I would believe this number if it was worldwide and if you're lumping all cap markets and some of the obscure product groups in there as well.

10/29/13

What they really need to do is get their company culture back on track. I've recently spoken to Pre IPO partners and all of them say they don't even recognize the company anymore. I am guessing there would be similar sentiments from other people who were senior at the big IBs before the 90s.

Follow the shit your fellow monkeys say @shitWSOsays

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In reply to hankyfootball
10/29/13

turnyasystemup:

holy cow! GS brand AND reasonable hours? Sounds too good to be...oh.


LOL

speed boost blaze

In reply to heister
10/29/13

heister:

What they really need to do is get their company culture back on track. I've recently spoken to Pre IPO partners and all of them say they don't even recognize the company anymore. I am guessing there would be similar sentiments from other people who were senior at the big IBs before the 90s.

Interesting point...but that can be said of all BBs - obviously banking has changed a lot - back in the day it was actually the go-to place to work if you wanted easy hours: banking was heavily regulated so there wasn't that much risk to take.

speed boost blaze

In reply to heister
10/29/13

Pre-IPO partners crying about loss of culture?
Let them wipe away their tears with their millions.

10/29/13

I'll throw my two cents in. As a first year MBA student, I've been spending a lot of time getting to know the various IBs, NYC BBs included. Granted this is all anecdotal, but I've spoken with a number of people, primarily associates, that feel there is a bit of a culture shift occurring on Wall Street. I spoke with one associate at a BB IB in NYC and he explicitly told me that he doesn't plan to stay at the bank much longer and that he is looking forward to transitioning back into his previous industry working in an operations role. I asked him if he's generally so blunt about his plans and he stated that he doesn't shout them from the rooftops, but that people senior to him know that he's not going to make banking his career. He also stated that senior members within the bank recognize that things are changing and that they are essentially okay with luring folks in the door (at the post-MBA associate level, at least) with the thought they might not stay long term. I guess the thought there is to get them in the job and hope they might just stick it out...as opposed to passing on that 'talent'.

I also had the chance to meet with GS and their associate panel mentioned the non-essential hours thing. I'll be meeting with them again in another week and see what else people have to say about it.

In my opinion, retaining talent is the problem GS and the IB industry faces as a whole. They have paid money for one of two reasons in the past, either your (a) a top talent and they want you or (b) you're above average intelligence and willing to bust your balls (read: Type A). I think the impasse is that you can only hope to reel in type A's so much. As the 'top talent' leaves Wall Street to pursue opportunities in industry or with tech companies, etc. Wall Street just ends up with more above-average people that want to work hard and/or have something to prove. The way I see it, hiring a few more people and trying to distribute the workload, and pay, among them isn't going to make these people happy. Once you take away the compensation incentive, then people start to leave the street in droves because...from what I can see...few people find the work fulfilling and they often have/had other options at places they might like just as well doing things they might find a bit more interesting. If you eliminate the 'out-sized' pay, you just give people less incentive to sacrifice...that is to say, few people will likely find working 70 hours on Wall Street much better than just working 60 or 65 at Google/Apple/Microsoft/Exxon/Etc.

Part of me thinks that if GS does something, it's very likely only a matter of time before other IBs follow suit. I certainly could be wrong, and I sort of wish I am, but only time will tell.

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so."
- Ronald Reagan

10/29/13

Obviously, you have to start with the caveat that IB is a client-facing industry and that weekends will never be totally off-limits ("essential clients clause"). But that's true of pretty much all high-paying jobs.

That said, this is the natural step in Goldman's progression towards trying to retain talent at the junior levels. I don't see why people find this so unbelievable. GS has been hinting in this direction for a couple years now, starting with the cessation of the two-year analyst program, rules against recruiting, etc. and the response has largely been, "Well, you can't grind your analysts out with punishing 100-hour weeks and expect them to want to stay!!" Consequently, their attempts at retention haven't been very successful, and many first years continued to recruit despite the new policies.

This step is an attempt to address that retort, and it's actually fairly easy to enforce with badge IDs, computer logins, etc. Cultural paradigm shifts aren't ever going to be easy, and there can be no doubt that a lot of senior people will take these new directives with a grain of salt. But this is enforceable if Goldman takes the initiative to cajole its senior officers into abiding by this policy.

Moreover, it's not an unreasonable request: I know several high-dealflow groups across the street that rarely-if-ever have analysts pulling 100-hour weeks. A great deal of IB work is avoidable and unnecessary, deriving from endless turns of a unimportant book.

The only snag is precisely what @cphbravo96 brings up above - the work is still unfulfilling for a lot of people, which is going to drive a fair bit of attrition in and of itself. That said, a great deal of corporate work is rote. It's not as though consulting or corpdev is existentially meaningful work vis a vis IB. A lot of the high-paying alternatives to IB are in the same category, they just lack the notorious sweatshop hours. It's hard for me to believe that, if you can convert IB into a 60-70 hour consistent gig, you won't see a considerable uptick in retention.

Whether or not GS actually follows through is an entirely different question, but this is completely reasonable to me.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

10/29/13

Let's be honest about something. People go into IB and finance in general for money. If the money goes, so do the people. It's not that hard. GS can't be that stupid to cut paychecks, because people would leave in droves.

10/29/13

One step closer to becoming one of those insufferable big corporations...pay going down. Might as well go to GE and countdown retirement

10/29/13

Sounds like an excuse to lower the salaries. I would be interested in seeing how the other banks react to this (in terms of lowering their salaries, too).

Once I did bad and that I heard ever. Twice I did good and that I heard never.

In reply to OfficerGodzilla
10/29/13

The bank actually used to do right by their customers, if you want an idea about what happened to the company read the book why I left Goldman Sachs. From what I have heard from my dad's friends it's very accurate of the culture decline at Goldman.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

10/29/13

End the need for Face Time. We have all experienced flat patches or the need for a post deal cool off period. Would be nice for MD's to respect that - tell analysts/associates to get out of the office - play golf for a morning, we all have phones and if something needs to be crunched can get to the office/laptop quickly

We are absolutely kidding ourselves if 60+ hour weeks are going to end. Imagine telling a client, sorry we won't have the LBO model updated until close of business tomorrow, our analysts need a rest. Investment Banking is about grunt work, if I wanted a 9-5 I'd have gone to an accounting firm.

Consultants at Bain, BCG and McKinsey easily do 60+ hour weeks

You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake son.

10/29/13

I saw this and thought back to my analyst days and sighed (mostly with relief that I'm not at that place anymore...)

But seriously: I agree that most likely, this is just PR bullshit. However, Goldman being Goldman (and there is no doubt in my mind, having now interacted with several parts of their franchise as a client, they are definitely a cut above most of their competitors) - I think there could be something here. GS has always prided itself on being long term greedy...and if you are running an investment banking department, you have a real issue right now, which is that your pipeline of long term talent looks totally fucked.

The single biggest reason is that, with exceptions, in general it's true that most of the future finance rockstars these days enter into Wall Street at the analyst level. I used to work in a top bb ibd group; the MDs were very smart (mostly), the analysts were very smart (mostly), and the associates through VPs were functional idiots (mostly)...And nowadays, all those analysts are leaving to go to hedge funds and private equity (and some of them aren't even coming in the door, going instead to work at Google). Out of my class (2009), I think there is maybe 1 analyst left in IBD who stayed on to the associate level; the other 100 or so are gone.

GS seems to have realized this with changing their bonus calendar and trying to ban some exit opp recruiting, but obviously those kind of policies have minimal effects. But if they were actually able to make this a job that didn't suck so much -- I would bet money that there would be more people who would stay.

Back in the 80s and 90s, PE/HF jobs just weren't that common or easy to get, so retention wasn't a huge issue (this is still the case in markets like Asia and Europe too from what I hear). Some people are saying this is just a ruse for college students -- and likely it is; but if so, then Goldman won't be able to stop their problem of kids leaving before their 2 years are up, and not sticking around after to become a part of the franchise. But it wouldn't surprise me if they actually try to make a real change here...

10/30/13

I'll throw in my opinion as well: I actually liked IB (for the most part) but could not stand the hours/culture. I might have considered staying longer if the hours were somehow reduced -- even if it meant less pay. If I had to do it all again today, I would probably still pick GS over Google coming out of college.

10/30/13

Shoot, as a summer associate I was averaging 110 hour weeks... I was sending summer analysts home even. Where is the love for the mba associates who have NO IDEA what we are doing? haha.

In reply to heister
10/30/13

heister:

The bank actually used to do right by their customers, if you want an idea about what happened to the company read the book why I left Goldman Sachs. From what I have heard from my dad's friends it's very accurate of the culture decline at Goldman.

Heister you be trollin'

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

In reply to West2East
10/30/13

West2East:

Shoot, as a summer associate I was averaging 110 hour weeks... I was sending summer analysts home even. Where is the love for the mba associates who have NO IDEA what we are doing? haha.

Yes because they obviously staff summers with other summers. You just wasted 3 seconds I'll never get back .

This scrub probably picks bulbasaur and has an all-grass type team complete with 4 bellsprouts and a tangela.

speed boost blaze

In reply to duffmt6
10/30/13

Well by doing right by their customer I mean they didn't openly shout on the trading floors about putting their customers in bad trades just so the bank could take the winning side of the trade. No one said banks were ever truly ethical places.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

In reply to torchic
10/30/13

My firm for a fact staffed summers with other summers too. Many of the summer analysts had projects they were staffed on with summer associates.

I also wasted 3 seconds I'll never get back on your second remark.

10/30/13

In my opinion, everyone knows the hours before they go in, so that's less of an issue.

The system to help with communication is a great idea, but we'll have to see if it works. I know there have been a number of times that I put together a pitch where we ended up pruning out a ton of information that wasn't necessary, but the reverse could happen as well. Having a well constructed 200 bullet outline of a pitch could end up creating a ton more work, if you end up throwing out 50 of those points the next day.

It's not the company. It's the credibility. My credibility. I can't just sit on the bench and let other people play the game. Not my game. Not with their rules. - Henry Kravis, Barbarians at the Gate

In reply to BlkWallSt
10/30/13

DWalk248:

My firm for a fact staffed summers with other summers too. Many of the summer analysts had projects they were staffed on with summer associates.

I also wasted 3 seconds I'll never get back on your second remark.

Same with mine. It is actually quite common.

As for the original topic, it's likely just lip service as most have said. Weekend work will never go away, but there are ways to make it better such as killing facetime and cutting unnecessary turns of the book.

10/30/13

Goldman is having trouble attracting talent? Wtf? And their reply is to cut hours and pay? Double wtf? I don't get it. Aren't monkeys dying to get into this place? Put the email from someone at Goldman here and he'll get a 1000 CV's no problem.

In reply to krauser
10/30/13

krauser:

Goldman is having trouble attracting talent? Wtf? And their reply is to cut hours and pay? Double wtf? I don't get it. Aren't monkeys dying to get into this place? Put the email from someone at Goldman here and he'll get a 1000 CV's no problem.


They have no trouble attracting talent. They have a problem retaining said talent.
10/30/13

I have been thinking about this today. I think the problem isn't just in the hours or pay at any IB. I think the bigger issue might be generational. A lot of kids these days want to do something they feel is really beneficial what ever that might be. I know kids have always felt this way but the generations growing up today have connectivity resources that didn't exist even 10 years ago. In the past banking has been able to attract not only the brightest kids but also the most determined, real grinders. People who started working at banks in the late 90s early 00s most likely at some point in their college careers had to do projects that required actual research in a library using actual books. There has been such a massive shift in how information is accessed, disseminated, and used that the banking pitchbook model seems antiquated by any rational persons view. When you can go on Google and research any topic, and correlate them into a high quality and source-able paper in a fraction of the time it took to look things up in books, you realize how technology has revolutionized the world. The world wide web is younger than construction time of some of the great buildings of the ancient world. It has gone from basic text only information pages to live high definition video medium that can be broadcast around the world to anyone whom has a connection, be it in their homes, or wirelessly on a cellular or wi fi network. By comparison banking looks like an old world profession where things in comparison take eons to change. More people are beginning to realize that life is in fact short so why spend it doing something you hate.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

10/30/13

analysts are not talent and goldman sachs does not care if they are retained. In fact they prefer to have them leave and go do something where they can be a client of the firm...that is the real point of hiring the best and brightest for the analyst program...its for future business, not to keep the analysts to be future GS bankers. This is why GS and other top banks foster "alumni networks" as if they are universities. So retention is not the reason, but I do believe this change is real and it is done a) because an analyst recently died and having analysts die isnt good press and b) because they want analysts to be treated at least somewhat fairly and much of the 100+ hour work week is based purely on senior people being dicks for no real good reason....last minute work, etc. It doesnt help anyone except sadistic bosses to have people be miserable for no reason.

So in short i think this is a real change and would be surprised if it doesn't result in less total hours for analysts but not for the reason stated.

10/30/13

"Goldman Sachs is likely to pay its analysts less now. Is this a HUGE MISTAKE?"
http://news.efinancialcareers.com/uk-en/154316/gol...

"He that hath a beard is more than a youth, and he that hath no beard is less than a man." -- William Shakespeare, Much Ado About Nothing

In reply to Bondarb
10/30/13

Bondarb:

analysts are not talent and goldman sachs does not care if they are retained. In fact they prefer to have them leave and go do something where they can be a client of the firm...that is the real point of hiring the best and brightest for the analyst program...its for future business, not to keep the analysts to be future GS bankers. This is why GS and other top banks foster "alumni networks" as if they are universities. So retention is not the reason, but I do believe this change is real and it is done a) because an analyst recently died and having analysts die isnt good press and b) because they want analysts to be treated at least somewhat fairly and much of the 100+ hour work week is based purely on senior people being dicks for no real good reason....last minute work, etc. It doesnt help anyone except sadistic bosses to have people be miserable for no reason.

So in short i think this is a real change and would be surprised if it doesn't result in less total hours for analysts but not for the reason stated.

I think you're 100% wrong here on GS not caring about retention. A lot of senior execs at Goldman have talked about this as a retention problem (even before this change), and some of their other policy changes (moving to a full year bonus cycle for example) don't make sense if you think they don't care about retention. The fact is that a lot of some of GS' biggest rainmakers (in IBD) over the years started at the firm as analyst, so it would be incredibly shortsighted not to value that talent.

10/30/13

Oh yeah Goldman clearly wants all their analysts to move to HFs and PE so that they can have more associates and senior bankers who started as Big4 accountants and GE analysts.

10/31/13

Speaking about 'talent' when you are talking about IBD analysts is ridiculous. Sure, some analysts develop into good bankers down the line but those are the guys who either would rather be relationship bankers in the first place or can't cut it on the buyside.

And being an analyst at GS vs. having started as a Big 4 accountant or GE analyst says nothing about your potential as a dealmaker. IBD analysts are hired on their ability to grind out excel models and powerpoint presentations until ungodly hours, and hopefully not be too much of a douche. Unless you are the son of some big-time banker or a Chinese dignitary, no one is hiring you at an analyst level because you look like a future rainmaker.

The fact that so many people on this board still glorify being an IBD analyst so much is proof GS is on the right track. Half the people here would give up their left nut to be an analyst at GS, lower pay or not.

In reply to torchic
10/31/13

Untwist your panties, that is how some staffings go.

+2 seconds.

In reply to heister
10/31/13

heister:

I think the bigger issue might be generational. A lot of kids these days want to do something they feel is really beneficial what ever that might be.

This is why people hate our generation...

"Unlike previous generations... we want to do something beneficial."

I assure you, people are the same all over. We haven't stumbled into new territory of career existentialism.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

In reply to NorthSider
10/31/13

I know all new generations are like this, the hippies, the people who left Europe for America etc. But the difference is the young generation now can easily do something about it. Technology allows people to change the world in some way with many orders of magnitude smaller initial input.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

In reply to GoodBread
10/31/13

GoodBread:

And being an analyst at GS vs. having started as a Big 4 accountant or GE analyst says nothing about your potential as a dealmaker. IBD analysts are hired on their ability to grind out excel models and powerpoint presentations until ungodly hours, and hopefully not be too much of a douche. Unless you are the son of some big-time banker or a Chinese dignitary, no one is hiring you at an analyst level because you look like a future rainmaker.

The fact that so many people on this board still glorify being an IBD analyst so much is proof GS is on the right track. Half the people here would give up their left nut to be an analyst at GS, lower pay or not.

Oh come'on. I'm no IB enthusiast, but analysts are hired on the basis of being intelligent, personable and hard-working, which are pretty much the key components of a successful MD.

Sure, some analysts develop into good bankers down the line but those are the guys who either would rather be relationship bankers in the first place or can't cut it on the buyside.

... that's exactly the point: great analysts go to the buyside and leave IB altogether. Hence, GS' focus on retention; hence, the cessation of the two year program; hence, this new firm policy on hours.

Regardless of everyone's insistence that this is some weird PR ploy, there is a considerable cohort of people at GS who (perhaps wrongly!) believe that analyst attrition is a problem. And that cohort has made some significant strides in the last couple years. That may be misguided, but it is real.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

In reply to GoodBread
10/31/13

GoodBread:

Speaking about 'talent' when you are talking about IBD analysts is ridiculous. Sure, some analysts develop into good bankers down the line but those are the guys who either would rather be relationship bankers in the first place or can't cut it on the buyside.

And being an analyst at GS vs. having started as a Big 4 accountant or GE analyst says nothing about your potential as a dealmaker. IBD analysts are hired on their ability to grind out excel models and powerpoint presentations until ungodly hours, and hopefully not be too much of a douche. Unless you are the son of some big-time banker or a Chinese dignitary, no one is hiring you at an analyst level because you look like a future rainmaker.

The fact that so many people on this board still glorify being an IBD analyst so much is proof GS is on the right track. Half the people here would give up their left nut to be an analyst at GS, lower pay or not.

Perfectly put. +1.

If you had 'talent' as a 22 year old you would be off curing cancer or going #1 in the NFL draft. Why do you think banks recruit MBAs into associate positions? They are looking for people with diverse backgrounds who have the potential to be good relationship managers after 4-6 years as an associate/VP. I would be surprised if more than 1 in 10 first year BB IBD associates eventually become managing directors, but they are ultimately hired with the hope they will develop into one. Analysts are hired to grind it out and go to the buyside, hopefully bringing business back and recommending the respective bank's analyst program to undergraduates.

In reply to GoodBread
10/31/13

GoodBread:

Speaking about 'talent' when you are talking about IBD analysts is ridiculous. Sure, some analysts develop into good bankers down the line but those are the guys who either would rather be relationship bankers in the first place or can't cut it on the buyside.

And being an analyst at GS vs. having started as a Big 4 accountant or GE analyst says nothing about your potential as a dealmaker. IBD analysts are hired on their ability to grind out excel models and powerpoint presentations until ungodly hours, and hopefully not be too much of a douche. Unless you are the son of some big-time banker or a Chinese dignitary, no one is hiring you at an analyst level because you look like a future rainmaker.

The fact that so many people on this board still glorify being an IBD analyst so much is proof GS is on the right track. Half the people here would give up their left nut to be an analyst at GS, lower pay or not.

Eh, might have to disagree here. Not so much on analysts having 'talent' persay, but I think we all (or most of us) can agree, that the top associates/VPs are former analysts themselves (rather than MBA laterals) and, at least in my experience, this holds true all the way up to the MD level.

In reply to heister
10/31/13

heister:

I know all new generations are like this, the hippies, the people who left Europe for America etc. But the difference is the young generation now can easily do something about it. Technology allows people to change the world in some way with many orders of magnitude smaller initial input.

Agreed, but in my eyes this only nominally affects career decisions. Sure, every Millennial has the pipe dream of starting the next-great-startup. So few will actually act on that dream.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

In reply to FormerHornetDriver
10/31/13

FormerHornetDriver:

If you had 'talent' as a 22 year old you would be off curing cancer or going #1 in the NFL draft. Why do you think banks recruit MBAs into associate positions? They are looking for people with diverse backgrounds who have the potential to be good relationship managers after 4-6 years as an associate/VP. I would be surprised if more than 1 in 10 first year BB IBD associates eventually become managing directors, but they are ultimately hired with the hope they will develop into one. Analysts are hired to grind it out and go to the buyside, hopefully bringing business back and recommending the respective bank's analyst program to undergraduates.

Come on.

Maybe 1 in 10 IB analysts I have met are "pure processors" devoid of social interaction skills. On the contrary, being personable is probably the single most consistent predictor of getting an offer among a pool of academic over-achievers.

Moreover, the buyside recruiting processes are so competitive, every last one of the people I have met at upper-MM+ firms is sharp, discerning, articulate and pedigreed. You're telling me that these are the people GS, et al have decided "oh, we can do without them, we were just looking for processors."

Firm alumni networks continue to exist whether the banks send their crappiest analysts to PE shops or best. HF exits pose no discernible benefit to banks. It's crazy to think this is how the system would work in GS' ideal world. And they are taking steps to change that.

It may not accomplish anything, but I refuse to believe that significant structural changes in employee contracts (no two-year program), actually-enforced recruiting policies (several analysts were fired) and a WSJ-published article about a new weekend policy (which is already in effect in the HC group!) is all some massive publicity stunt.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

In reply to GoodBread
10/31/13

GoodBread:

Speaking about 'talent' when you are talking about IBD analysts is ridiculous. Sure, some analysts develop into good bankers down the line but those are the guys who either would rather be relationship bankers in the first place or can't cut it on the buyside.

And being an analyst at GS vs. having started as a Big 4 accountant or GE analyst says nothing about your potential as a dealmaker. IBD analysts are hired on their ability to grind out excel models and powerpoint presentations until ungodly hours, and hopefully not be too much of a douche. Unless you are the son of some big-time banker or a Chinese dignitary, no one is hiring you at an analyst level because you look like a future rainmaker.

The fact that so many people on this board still glorify being an IBD analyst so much is proof GS is on the right track. Half the people here would give up their left nut to be an analyst at GS, lower pay or not.


I guess we have different definitions of talent. By talent I mean a good well-rounded candidate, as polished as a 20 year old can be, e.g. a 3.8 guy from Wharton.
You are telling me that they would rather have all the 3.8 Wharton guys who went through the analyst programme leave for something better and instead staff their associate programme with ex-big4 accountants with an MBA from a top 20 school? I don't need to glorify Goldman or IBD analysts to see that this is simply not true.
10/31/13

Analysts are not talent. Even where i work at a hedge fund the analysts are not talent and they are 4-5 years older. The talent are the producers...the people who make money or on the sell-side the people who bring in the deals. The proper analogy is a baseball team like the yankees...the 25 players on the roster are the talent. The cast of hundreds that shine their shoes, get the field ready, throw them batting practice, etc are important but they are all 100% replaceable and nobody is realistically expecting them to become players. If the Yankees don't resign robinson cano nobidy is expecting the bat boy to step up and play 2nd base.

As analysts in banking you are the ball-boys...nice to have around but nobody cares if you leave.

In reply to Bondarb
10/31/13

Bondarb:

Analysts are not talent. Even where i work at a hedge fund the analysts are not talent and they are 4-5 years older. The talent are the producers...the people who make money or on the sell-side the people who bring in the deals. The proper analogy is a baseball team like the yankees...the 25 players on the roster are the talent. The cast of hundreds that shine their shoes, get the field ready, throw them batting practice, etc are important but they are all 100% replaceable and nobody is realistically expecting them to become players. If the Yankees don't resign robinson cano nobidy is expecting the bat boy to step up and play 2nd base.

As analysts in banking you are the ball-boys...nice to have around but nobody cares if you leave.

That's the thing. Junior bankers used to be the farm team. Now they are the ballboys. So you end up paying for big free agents (poached MDs with guarantees) because you have no farm system. And your comp ratio goes up as revenues fall and your boss/shareholders are unhappy.

Also, most fundamental equity/credit hedge funds do view their tenured analysts as talent (at least role players) that the producers would be at least inconvenienced to be without.

In reply to NorthSider
10/31/13

NorthSider:

FormerHornetDriver:

If you had 'talent' as a 22 year old you would be off curing cancer or going #1 in the NFL draft. Why do you think banks recruit MBAs into associate positions? They are looking for people with diverse backgrounds who have the potential to be good relationship managers after 4-6 years as an associate/VP. I would be surprised if more than 1 in 10 first year BB IBD associates eventually become managing directors, but they are ultimately hired with the hope they will develop into one. Analysts are hired to grind it out and go to the buyside, hopefully bringing business back and recommending the respective bank's analyst program to undergraduates.

Come on.

Maybe 1 in 10 IB analysts I have met are "pure processors" devoid of social interaction skills. On the contrary, being personable is probably the single most consistent predictor of getting an offer among a pool of academic over-achievers.

Moreover, the buyside recruiting processes are so competitive, every last one of the people I have met at upper-MM+ firms is sharp, discerning, articulate and pedigreed. You're telling me that these are the people GS, et al have decided "oh, we can do without them, we were just looking for processors."

Firm alumni networks continue to exist whether the banks send their crappiest analysts to PE shops or best. HF exits pose no discernible benefit to banks. It's crazy to think this is how the system would work in GS' ideal world. And they are taking steps to change that.

It may not accomplish anything, but I refuse to believe that significant structural changes in employee contracts (no two-year program), actually-enforced recruiting policies (several analysts were fired) and a WSJ-published article about a new weekend policy (which is already in effect in the HC group!) is all some massive publicity stunt.

9 times out of 10 I agree with your posts. But I think you're being a little naive here.

All this sideshow stuff, like new employee contracts, press releases, and new recruiting policies? Honestly, I don't think it means shit. The new contracts are worthless. They don't guarantee an associate promotion. It's just a carrot on a stick. "See, maybe you can stay! If we like you." Press releases? This is Goldman. C'mon. They've been leaking stuff to the Journal for a looooong time. And recruiting policies? I had an ex-girlfriend who would flip out any time I was texting like, literally any other girl. Super possessive. She still cheated on me. Goldman is a psycho-jealous-bitch. I wouldn't confuse that with like, loyalty. It's all about control.

If Goldman honestly wanted to retain top analyst talent, they would start writing fat checks to the guys staying for a third year. This is fucking Wall Street. Money talks. Elite boutiques pay up to keep their people around. Private equity firms pay up to get the best. It's not like Goldman doesn't know that. They just don't care.

Aaaaand it looks like they're actually cutting bonuses: http://www.bloomberg.com/news/2013-10-31/wall-stre...

(Some smart-ass is going to try to argue that they can't increase bonuses because they're publicly traded and investors would get pissed. To that, I say: $KKR, $EVR, $GHL, $BX...)

In reply to Bondarb
10/31/13

Your firm is destined to fail at some point if you don't have some system (however informal it may be) to develop young talent in a firm where the only value is in the people. That should be obvious to people who are paid to predict the future.

Your analogy does not ring true. Secretaries are not talent. Analysts most definitely are. The top ones are people that will be running the firm in 20 years.

In reply to Bondarb
10/31/13

Bondarb:

Analysts are not talent. Even where i work at a hedge fund the analysts are not talent and they are 4-5 years older. The talent are the producers...the people who make money or on the sell-side the people who bring in the deals. The proper analogy is a baseball team like the yankees...the 25 players on the roster are the talent. The cast of hundreds that shine their shoes, get the field ready, throw them batting practice, etc are important but they are all 100% replaceable and nobody is realistically expecting them to become players. If the Yankees don't resign robinson cano nobidy is expecting the bat boy to step up and play 2nd base.

As analysts in banking you are the ball-boys...nice to have around but nobody cares if you leave.

The "producers" are pretty replaceable as well...there are thousands of them.

A chain is no stronger than its weakest link.

Sometimes I go about in pity for myself, and all the while a great wind carries me across the sky
11/1/13

LOL at people claiming it takes "talent" to be an IB analyst. A fucking homeless man could do this job, it's not rocket science.

In reply to Bondarb
11/1/13

Bondarb:

Analysts are not talent. Even where i work at a hedge fund the analysts are not talent and they are 4-5 years older. The talent are the producers...the people who make money or on the sell-side the people who bring in the deals. The proper analogy is a baseball team like the yankees...the 25 players on the roster are the talent. The cast of hundreds that shine their shoes, get the field ready, throw them batting practice, etc are important but they are all 100% replaceable and nobody is realistically expecting them to become players. If the Yankees don't resign robinson cano nobidy is expecting the bat boy to step up and play 2nd base.

As analysts in banking you are the ball-boys...nice to have around but nobody cares if you leave.

Of course the RMs at the top are way more important than Analysts - that goes without saying.

But I would take an IB Analyst over an Associate / VP any day of the week. A fair amount of the reason for that is that the top "talent" (people blowing up about the use of that word, so put it in quotes) heads to the buyside. I don't see why it's so ludicrous to think they want to change that. I'm not saying Analysts are cosmically important to the operations of the business, merely that these are - mostly - intelligent, driven, articulate kids that the bank spent millions recruiting. Why not try to keep them around?

Only on WSO is the reaction to paying 22 year-olds $300k in two years after spending millions recruiting at the nation's top undergraduate programs and simply letting them walk out the door a nonchalant "meh, who cares?"

A bunch of people in here are wondering why there is a talent drain to startups, consulting, etc. The attitude reflected above is the root precisely.

9 times out of 10 I agree with your posts.

Good to hear there's at least one person out there!!

All this sideshow stuff, like new employee contracts, press releases, and new recruiting policies? Honestly, I don't think it means shit. The new contracts are worthless. They don't guarantee an associate promotion. It's just a carrot on a stick. "See, maybe you can stay! If we like you." Press releases? This is Goldman. C'mon. They've been leaking stuff to the Journal for a looooong time. And recruiting policies? I had an ex-girlfriend who would flip out any time I was texting like, literally any other girl. Super possessive. She still cheated on me. Goldman is a psycho-jealous-bitch. I wouldn't confuse that with like, loyalty. It's all about control.

So your argument is that they did all of this for what? Good PR?? How does preventing analysts from working weekends contribute to "control"?

If Goldman honestly wanted to retain top analyst talent, they would start writing fat checks to the guys staying for a third year. This is fucking Wall Street. Money talks. Elite boutiques pay up to keep their people around. Private equity firms pay up to get the best. It's not like Goldman doesn't know that. They just don't care.

Unless you're writing huge checks for 3 dozen hours a week of useless work. If that's the case, it's a much shrewder policy to cut out those hours and maintain pay.

Not sure of your experience, but I've seen plenty of analysts jump ship for lower-paying gigs on the buyside, in corpdev, consulting, startups, etc. This really isn't all about the money. It matters, but IMO the culture of banking contributes quite a bit more to attrition than does substandard pay.

I hear a ton of bankers complaining about rote work and 100-hour weeks; rarely do I hear them complain "I don't make enough money for a 22 year-old".

My bottom line:

Every paradigmatic shift is going to sound ridiculous and incite scoffs at first. But I've started to see precisely this trend at the elite boutiques: not only do they pay their analysts more and give cash incentives for people staying a 3rd year, but they also have slowly been reducing workloads for analysts (LAZ is a notable exception). Analysts at GHL / EVR / BX / Moelis are working considerably less than BB peers, and they seem a lot happier / more willing to entertain the idea of staying a 3rd year than do BB analysts. I just don't buy that the primary reason is because they're making $25-30k more than their BB peers - it's because their job isn't as punishing.

If there's one thing that IB teaches you very early on, it's that an incremental $20k here or there is nothing worth making life decisions based on. I would gladly take a cut in pay for more (predictable) vacation time in a year.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

11/1/13

I am a first year analyst at Goldman Sachs in New York. I can understand the surprise at the number 332, but that is indeed the number of IBD analysts worldwide at Goldman. I was surprised that there were so few during training in June / July (that training represents the worldwide analyst class).

Also, they are very serious about improving lifestyle and retention. I think people will still head to PE / Hedge Funds in droves, but it will help on the margins (ie. a marginal amount of people who would have otherwise left will stay each year).

11/1/13

Talent in IBD means being good at getting clients to to do deals and go to cap markets through you as opposed to the other guys, squeezing out big fees while maintaining good relationships.

Having a 3.8 at Wharton and being personable is not talent. It shows someone is probably hard-working and smart but in no way can you tell someone will be a good MD when interviewing for analyst positions. Smarts, dedication and a decent personality are essential to becoming a good MD but those people are a dime-a-dozen, including at the Big 4 or GE-style corp. dev programs.

Cutting weekend hours is a good PR move but GS didn't become the biggest name on the Street by pampering its "talented analysts." There's a reason the standard MO for banks on Wall Street for decades has been to hire for the long-term after an MBA. That is slowly changing but the fact remains that the talent in IBD brings in deals. Creating pitchbooks no one reads and spreading comps that say 7.5x EBITDA is at best a rite of passage.

In reply to GoodBread
11/1/13

so true. In the grand scheme of things, investment banking is still a business and business needs those superstars to source deals and maintain the relationships

In reply to bschoolhopeful
11/1/13

My group (not GS), has a 36 hr blackout period as well. It's not like it results in less work needing to be done and it definitely makes the weekdays longer. Still, it's nice to be able to plan something once a week.

In reply to GoodBread
11/1/13

GoodBread:

Talent in IBD means being good at getting clients to to do deals and go to cap markets through you as opposed to the other guys, squeezing out big fees while maintaining good relationships.

Having a 3.8 at Wharton and being personable is not talent. It shows someone is probably hard-working and smart but in no way can you tell someone will be a good MD when interviewing for analyst positions. Smarts, dedication and a decent personality are essential to becoming a good MD but those people are a dime-a-dozen, including at the Big 4 or GE-style corp. dev programs.

Cutting weekend hours is a good PR move but GS didn't become the biggest name on the Street by pampering its "talented analysts." There's a reason the standard MO for banks on Wall Street for decades has been to hire for the long-term after an MBA. That is slowly changing but the fact remains that the talent in IBD brings in deals. Creating pitchbooks no one reads and spreading comps that say 7.5x EBITDA is at best a rite of passage.

You're right. Obviously Goldman is making all these changes for the "good PR" associated with the headline "Goldman Sachs fires 23 Year-Olds for Buyside Recruiting". That's also obviously why the HC group, in the total absence of media coverage, has quietly implemented something similar to this weekend policy.

Clearly, that's a much more plausible explanation than thinking that, somewhere within the confines of GS, there is a small group of people that care a little about analyst attrition. Ridiculous!!

You're making the silly assumption that by keeping an analyst on for a 3rd year, you're automatically committing to making them a Partner someday. And, further, that just because it's possible to locate other people who can be successful MDs, you shouldn't put one iota of effort into retaining junior employees.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

In reply to GoodBread
11/1/13

GoodBread:

Cutting weekend hours is a good PR move but GS didn't become the biggest name on the Street by pampering its "talented analysts." There's a reason the standard MO for banks on Wall Street for decades has been to hire for the long-term after an MBA.

Actually, I would completely disagree with this. The post-MBA hire is a fairly recent (read: last 15-20 years) phenomenon. Good percentage of the Partners/MDs are former analysts, hired in the 70s and 80s when banking as a career was much more commonplace.

11/1/13

I'm not saying GS is in no way worried about analyst attrition but being first mover on such an issue does have a PR aspect to it, including as a selling point to future analysts.

I never said anything about 3rd year analysts becoming partners, just that analyst attrition can't be that high up GS's priority list when poaching talent is always a possibility given the brand name. That said, I'll concede that GS likes to get their people started in the "GS culture" as early as possible. I'm not saying you should put zero effort into retaining junior employees, just that all the references to IBD analysts as "the talent" are delusional, and to put IBD analysts on such a pedestal vs. corp dev people or accountants is a little ridiculous. Your average IBD analyst is probably willing to grind out more hours and may be more polished than your average Big 4 auditor, but he's still got a long ways to go before becoming a big-shot.

And considering the boom in MBAs going into banking started in the 80s, I think saying decades is fair. 25 years is a really long time in this business.

11/1/13

Ill make a sports analogy for all of you out there that seem to be incapable of understanding that analysts are in fact talent. The Yankees are the worst sports franchise in America by some standards and the one of the best by others. Sports exist in their own word of business realities. As big as banking is, banking does not exist in this world of we can simply pay more for talent and not have to worry about the bills. This is what the Yankees are. The Yankees don't have to worry about their payroll because they have revenue streams that don't exist in any other business. The Yankees win many games, they make tons of money. However they are not the most successful team in the MLB. If you measure success on a dollar per win basis. The Yankees would be in the middle of the league at best, more likely the bottom quarter. Banks have enormous resources to pull from and can pay tens of millions to an employee and not bat an eye. However they can not simply just keep paying every person more money to solve their problems. You bump every ones pay 20% that becomes the new norm and guess what. People still leave at the same rate they are now. Because its no longer viewed as a pay increase its the norm. Banks have performance measures to meet. They have stock holders not some deranged mad man in a high backed chair that only cares about championship trophies. If I was dead broke you couldn't pay me any amount of money that would get me to work 100 hour weeks every week. Banks have to find new ways to improve their talent pipelines. The industry is changing, there are quite frankly better options that didn't exist 20 or hell even 10 years ago.

Follow the shit your fellow monkeys say @shitWSOsays

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In reply to GoodBread
11/1/13

GoodBread:

I'm not saying GS is in no way worried about analyst attrition but being first mover on such an issue does have a PR aspect to it, including as a selling point to future analysts.

I mean... that's my point. This will appeal to analysts and hence reduce attrition. That's not really PR, it's HR.

I never said anything about 3rd year analysts becoming partners, just that analyst attrition can't be that high up GS's priority list when poaching talent is always a possibility given the brand name. That said, I'll concede that GS likes to get their people started in the "GS culture" as early as possible. I'm not saying you should put zero effort into retaining junior employees, just that all the references to IBD analysts as "the talent" are delusional, and to put IBD analysts on such a pedestal vs. corp dev people or accountants is a little ridiculous. Your average IBD analyst is probably willing to grind out more hours and may be more polished than your average Big 4 auditor, but he's still got a long ways to go before becoming a big-shot.

And considering the boom in MBAs going into banking started in the 80s, I think saying decades is fair. 25 years is a really long time in this business.

I agree with this entire chuck. That still doesn't change my perspective on this. The hoopla on this thread re: the word "talent" is semantic. I don't care what you call them, the reason these policies were implemented is simple and straightforward: to reduce analyst attrition. Not because some media relations megalomaniac decided he would completely alter firm policy and leak it to WSJ so that the 7 non-Wall Street people who actually read this article will think "Oh what a good firm that must be."

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

In reply to heister
11/1/13

heister:

Ill make a sports analogy for all of you out there that seem to be incapable of understanding that analysts are in fact talent. The Yankees are the worst sports franchise in America by some standards and the one of the best by others. Sports exist in their own word of business realities. As big as banking is, banking does not exist in this world of we can simply pay more for talent and not have to worry about the bills. This is what the Yankees are. The Yankees don't have to worry about their payroll because they have revenue streams that don't exist in any other business. The Yankees win many games, they make tons of money. However they are not the most successful team in the MLB. If you measure success on a dollar per win basis. The Yankees would be in the middle of the league at best, more likely the bottom quarter. Banks have enormous resources to pull from and can pay tens of millions to an employee and not bat an eye. However they can not simply just keep paying every person more money to solve their problems. You bump every ones pay 20% that becomes the new norm and guess what. People still leave at the same rate they are now. Because its no longer viewed as a pay increase its the norm. Banks have performance measures to meet. They have stock holders not some deranged mad man in a high backed chair that only cares about championship trophies. If I was dead broke you couldn't pay me any amount of money that would get me to work 100 hour weeks every week. Banks have to find new ways to improve their talent pipelines. The industry is changing, there are quite frankly better options that didn't exist 20 or hell even 10 years ago.

I agree with all of this as well. Just because analysts aren't currently raking in revenue for the firm doesn't make their development and attrition unimportant. This series of new policies from GS isn't going to fundamentally change the realities of a client-facing industry, but they will help take small steps (or so GS hopes) towards reducing turnover at the junior levels.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

In reply to GoodBread
11/1/13

The GS culture died several years ago. It looks like they might be trying to revive it. But I think that might be difficult as the industry as a whole has a serious culture issue.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

In reply to GoodBread
11/1/13

I agree that using the word 'talent' to describe someone just out of college is a bit iffy. However, I still fail to see how 80-90% of analysts leaving is a good thing for GS. I admit I have never worked a day in my life in IBD, so maybe I am a bit naive and clueless, but if I am to choose between 1) keeping someone who has worked in the business for 2-3 years, who started in the 'GS culture' and I've known for 2-3 years and 2) hiring someone with no experience in banking, who has not worked for the company before and I've only met for a day of interviews, I'd choose option 1) every time.
I also agree that to a certain extent it's a PR move, but this doesn't mean that there isn't genuine desire in the firm to keep their staff from leaving and improve working conditions as much as possible.

In reply to DickFuld
11/1/13

i work at a firm that has been around 25 years on the model...the naivete is on ur side thinking that analysts are talent. they aren't. being able to proofread a spreadsheet doesn't make u more qualified then a secretary...that is a fact and while u may not believe it it is how the higher-ups view analysts.

In reply to Going Concern
11/1/13

Going Concern:

Bondarb:

Analysts are not talent. Even where i work at a hedge fund the analysts are not talent and they are 4-5 years older. The talent are the producers...the people who make money or on the sell-side the people who bring in the deals. The proper analogy is a baseball team like the yankees...the 25 players on the roster are the talent. The cast of hundreds that shine their shoes, get the field ready, throw them batting practice, etc are important but they are all 100% replaceable and nobody is realistically expecting them to become players. If the Yankees don't resign robinson cano nobidy is expecting the bat boy to step up and play 2nd base.

As analysts in banking you are the ball-boys...nice to have around but nobody cares if you leave.

The "producers" are pretty replaceable as well...there are thousands of them.

A chain is no stronger than its weakest link.

that is true...the prdoucers are only as good as their last year/month/day/whatever...i have been on both sides and when u r on the production side the pressure is much more b/c you know the reality which is that you are just a number in black and white at the bottom of a PnL statement. But at least that is fair and i would never create the mental bullshitt thought that i am somehow more valuable then that stream future income. You fight years in this business to be able to show that you can create a serious number art the bottom of that page and you getpaid very well if you can do it.

In reply to wlst1
11/1/13

do you think goldman has made more on deals brought in by analysts that became senior bankers or on client business driven by former analysts business dealings down the road?

Answer that question honestly and you will realize that they are perfectly happy for all the analysts to leave feeling happy about their experience and that they somehow deprived the bank of their "talent" by leaving. If they wanted you to stay would they make a big deal about the "alumni network"? Get real the analyst program is a 2 year sales pitch to get future business from highly educated and well-connected people, its not a place where they intend to create future bankers.

In reply to Bondarb
11/1/13

Bondarb:

i work at a firm that has been around 25 years on the model...the naivete is on ur side thinking that analysts are talent. they aren't. being able to proofread a spreadsheet doesn't make u more qualified then a secretary...that is a fact and while u may not believe it it is how the higher-ups view analysts.

That's not how I view my analysts, I like them to learn how we do things and keep the good ones over time. If your firm is willing to place zero value in them and is willing to pay extra to get seniors to lateral over who still have to learn your system, then more power to you. It's just a bad way to run a business.
In reply to Bondarb
11/1/13

Answer that question honestly and you will realize that they are perfectly happy for all the analysts to leave feeling happy about their experience and that they somehow deprived the bank of their "talent" by leaving. If they wanted you to stay would they make a big deal about the "alumni network"? Get real the analyst program is a 2 year sales pitch to get future business from highly educated and well-connected people, its not a place where they intend to create future bankers.

All of this runs pretty contrary to already-implemented GS policy.

Is the anti-recruiting policy, using which they fired several analysts who had outstanding buyside offers, part of their plan to turn over analysts with a great "2 year sales pitch"?? I suppose the cessation of the two-year program a part of the "2 year sales pitch" as well??

Come on, you guys are the ones being naive here. In your attempt to flush out whatever misguided self-importance you sense from IB analysts in this thread, you're ignoring the simple and obvious explanation for this policy.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

11/2/13

Once again speaking from an insider's perspective. Surprised at how much they actually do care about lifestyle and retention. The general sentiment from the top seems to be that post-MBA hires just aren't as impressive as analyst hires. Many of the best partners and md's started as analysts and they realize that all the best analyst talent is going to the buy side. Not only are they going to the buyside, but unlike before, many aren't even finishing out the (formerly) 2 year analyst program.

In reply to OfficerGodzilla
11/2/13

I agree, they handled that immediately. I'm surprised at how little "outrage" it sparked

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