Don’t become the “cheap labor” guy
Happy earnings, everyone.
Ignore my handle, I’m no longer an intern, nor have I been in a while.
This is some advice for the first and second-years.
When I first joined, one of the first things that took me by surprise was the wide range of hours/responsibilities/day-to-day lives of the junior associates. Some of them, outside of earnings, were basically offshoots of their senior. They’d build models and write notes from the ground, themselves, without senior approval. They’d field their own client calls, attend conferences alone, host panels, and push for their own coverage. Often, they’d work 70+ hour weeks on the regular, and did so without any extra bonus or recognition.
Others milked the “pseudo-intern” role for years. They’d work hard when they needed to and would do solid work on tasks they were explicitly assigned, though these were largely boilerplate note writing, updating models, brief news flow notes (that would need to be checked over), and “PowerPoint monkey” work. They’d get good at this in time, but wouldn’t really grow or become any more senior analyst-like.
I’ve seen those in the second group become perma-associates. Never really expanding in their role, but getting small raises to basically become the “master of junior-level work.” They realize they’re kept on as cheap labor, get upset about this, but lack the skills and reputation for their age and experience to move on.
Avoid this at all costs.
Happy earnings to you as well :)
I agree, this role is very self-driven. If something need to be written, updated, or drafted the associates are the first to (usually) initiate this. The one thing I would caveated is that someone could be in the second bucket but are doing so to figure out if ss/bs research is for them or not.
For example, I'll look at myself. I enjoy the reading, modeling, and certain aspects of the research role. However I realized that talking to clients, caring about 20 names, and other minute details are something that doesn't interest me that much. So if that means I am the "master intern" on my team, that's ok. As long as I don't mess something up horribly or mess the team up then I'm ok being in that role, as I'm figuring out the next move for me. Hope this paints the people in the second bucket a bit better (even though you weren't saying anything rude). Plus, figuring out the next move doesn't take years and years, maximum it takes is a year to A) say "yea this really isn't my cup of tea", and B) start recruiting for something else (probably in something corporate for wlb and decent pay).
Forgot to mention but please let me know your thoughts on this. Cheers.
This is a poor choice:
1) Until you have your next move in place, you want the optionality to stay and advance in your current role
2) It's hard to know for sure that you want to or don't want to do something until you've tried it. Anything new is going to be more challenging at the start. Unless you've really given it a good faith effort over a long period of time, you're just not in a good place to definitively rule something out
3) You never know when you need or would benefit from a recommendation or introduction from an old team member, whether that's to a client, to a new job or anything else
What you proposed may very well end up working out for you and I'm sure there are plenty of examples where it didn't matter. On average though, would not recommend it
What is your advice for one to get into the first group?
This discussion overlooks that the first group could be considered “cheap labor” more so than the second group. They are taking on additional responsibilities and working harder for more hours of the day for little-to-no additional compensation. Sure they might get a little more come bonus season but there are bands based on seniority/level anyways so it’s not enough to warrant the extra effort. This is not an “eat what you kill” business. From the company’s perspective, the first group is literally cheap labor that benefits the firm more than anyone else.
In the long term, sure the first group is more likely to advance to an analyst position or lead coverage opportunities. However, this is likely 5+ years down the road minimum. The vast majority of associates will exit before this.
We can talk about exits to the buyside in which the first group would be better prepared since they are actively having discussions with clients and are more in-tune with sentiments. With that said, the notion that most get their buyside looks from “on the job” client relationships is soo overblown. Most people who successfully make the jump are networking outside of work and getting reps of actually doing pitches/acting as an investor. In this case, one could argue that the associates who work less hours would have more time to do this and close the gap enough to be competitive.
There are pros and cons to both categories of associates. To say that one is objectively better than the other is a little misguided.
This is also true, those who go above and beyond are providing a surplus act at a (heavily) discounted rate. But that's ignoring personal goals. If one wants to be a lifer, then sure go above and beyond, better start sooner than later. (This is coming across as if I'm disagreeing with you which I'm not, just adding some more color to the situation). I think it's normal to be in this seat as an associate and try to "coast" until one learns enough to say whether or not they want a longer career in research (coast meaning do the job correctly and provide some value but don't write your own initiations or models if not needed).
This is a shrinking industry (not at the rate people believe it to be but that's beside the point) that demands a lot with pay always being under what we want. It's also very important to take a step back and see if this is something a person wants to do long term. I think it's more than understandable to see this role as a learning experience, see what skills you enjoy and what you want to develop more, and take the next step. As someone who was dead-set on going from SS to BS this experience I have now made me realize that there are aspects in research that I miss (such as using my research skills, propose on working on a product and implementing rather than just commenting on what the space looks like).
Different strokes for different folks, we are all creating our lives how we see fit. :)
I would argue that if and only if your plan is “one to two years and out,” and you are actively taking steps to pursue a Buyside opportunity (networking, taking modeling courses, preparing pitches and for interviews, and levering your job to learn the space/client focuses), then it makes sense to do the bare functional minimum and grind like there is no tomorrow on buyside preparation.
Otherwise, the only way to advance on this job is to force yourself forward. This isn’t like IB, it doesn’t happen in lockstep. There are “chiller” associates with ten-year associate tenure and no lead coverage. Being in this position entails insignificant comp growth from the 25 year-old sitting next to you, and limited career growth and exit opportunity. And you still have the same conferences, late earnings nights, and stressful initiation phases. This is an unenviable seat.
ER requires discipline. Either to work towards the buyside or climb on the sell-side. Know which one you want and work towards it. Sitting idle and expecting the tides to push you forward (as would work in “endure and then you’ll be paid” IB seats or bureaucratic F500 jobs) doesn’t work here.
If this idea stresses someone out, I’d probably advise (after a couple to a few years on the job) considering business school and a pivot, or trying to switch internally to IB.
My only question would be, if a position in the corporate world seems appealing (Strategic Finance/Corp Strat/Biz Dev/Competitive Intelligence) over the Buy-Side, could the "coast" mentality be ok? I'm a bit of an outlier solely for the fact that I have 90% technical skills but did not have the formal experience to have on my resume so getting to corporate positions would have taken some convincing.
I 100% agree that this role requires someone to play offensively rather than wait for something to develop (that's a fact in any position that pays decent money in my opinion).
I think you missed one small point of mine that is kind of important. There are far more outcomes than jump to buyside or stay on sell-side hoping for an analyst seat. In fact, I would say a very large portion if not the majority of the ER exits/outcomes are in the IR/Corp Fin/Strategic Fin/F500 area. The decent paying positions there require a few years of experience, so I would say a very normal outcome for people on this path is to “coast” for 2-5 years in ER before switching to some sort of Corp Fin position. I think it’s pretty rare for someone to stay much longer than that except to become senior analysts.
You have this idea that you have to be moving forward but that’s not necessarily true. As you pointed out, this is not like IB where you have a defined upward trajectory. In ER, it’s basically associate or analyst, there are titles to make you feel more senior but it’s the same. So there’s not a lot of room up to go unless you want the senior analyst seat, which isn’t the case for 90% of the people who join ER. The idea for the “coasters” is to build YoE at a job where you can build a decent skillset that is valued elsewhere without working 75+ hours a week (IB).
What this poster said.
Exactly this. Why do you want to be in the first category when you could spend time perfecting that one pitch that lands you a HF seat?
I have a director like this. He’s great at admin - so sharp and great at being on top of things. Actually really good for analysts to work for (even tho he’s a hardass) because they know how to run a process and give u guidance, very accessible etc.
But they can never make MD like that. No client relationships. Zero. They don’t really speak to them and nurture that. They can’t, it’s too late and he doesn’t know anything. Ur capped.
The key thing is, if you want to do that for a year as an associate, that’s fine. But if you’re doing that for 5 years, ur screwed and your career will stagnate. Unless you don’t have further ambitions, it’s not worth it. Quite frankly, the issue is that if ur not PnL generating yourself, you’re not really protected at large institutions and you have less leverage to leave too
Great post. Noticed a lot of these second bucket people at my bank. It’s frustrating because they’re blatantly giving lower effort and are less intelligent but get compensated similarly at the junior level. I’m glad that there is a material difference in career trajectory over time.
I am a second bucket analyst. Get laid dweeb
I think you can quite easily avoid being in the second bucket by finding smart ways to automate your tedious tasks, so that you can focus on actually providing value, rather than being seen as a data entry excel/powerpoint monkey. You have a big brain, find out how to maximize its use.
definitely agree with this, and have applied this in my worklfow at work. If you're spending all your time just literally entrying historicals and updating your models, you're not going to move the needle in terms of your performance, You need to automate this away quickly, and reliably, and expand your scope.
Any suggestions or tips for doing this reliably? tried this early as the cheap labor junior guy but gave up after running into so many edge cases (filings detail or formatting changes) and worrying about inevitably having to explain that a number was wrong b/c of my automation
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