So this is a curiosity post. This isn’t a classic preachy WSO post where I subtly talk shit about the very industry I choose to work in.
So please just be honest and leave ego out of it.
I am curious what the true incentive is, psychologically, for junior bankers. Both Analysts and Associates. To work hard OR not work hard. I’d appreciate insight or examples as the very examples I see are so paradoxical, insight has been left out of reach.
Recently, I was informed how difficult it is to be fired, usually, from an IB job... even if you are completely detrimental. I was told without a blatant HR violation, getting fired rarely happens. First of all, why??? If someone is bad can they not get axed like any other job? There’s an associate who literally is known to be pet time, he works maybe 50 hours a week on and off site and sometimes south of 40 on. I don’t care personally as I find FaceTime to be the single biggest problem with the job, but this dude is totally fine doing this. Quite frankly, I don’t think he would care
Either way.
Additionally, and most importantly where is the incentive? My first comment/question leads me here. After further reflection I asked myself, why do people choose to subject
Themselves to horrible hours when others don’t? For instance, I have heard at the top 3-5 bulge brackets the Analyst pay is largely the same +/- $5k. I’ve heard each “bucket” is about a $5-10k differential within these aggregations.
I don’t want to sound pompous but assuming bottom gets $40 and top gets $60, but post tax only takes home another $10k (not suggesting it’s chimp change just be patient) is it really worth the differential that is to be realized physically/mentally? A bottom bucket analyst is notorious for leaving st 5, yup thats true, 5. She just does it and that’s that. How can you justify working on average 40 hours more Than she does for $10 grand? Or is it not about the money at all you might say? Well that’s curious as everyone seems to dislike the work... so is it Really the 10k? The ego? The ability to be a “success story” on the internet? Is it to get that shiny new dive watch? Is it to gloat the coveted “top analyst” trophy when interviewing when in reality it’s confidential and you could be lying? Or is it just the hype, the fact that it sounds like a good idea?
It’s most interesting solely because of this: for 90% of junior bankers the job is a stepping stone, a path to another job at a different company. So why do people choose the paths they do?
My “answer” is the drive to be “the best” that we often find working this job. We all know Goldman purses the insecure for this very reason. People with completely normal chemical balances don’t typically choose to subject themselves the work=life mantra for more than a few years, if at all - this is news to no one. (That’s not to be negative any tech billionaire isn’t chemically stable by definition but looks more fun than working a 9-5.)
Regardless of internal personality though I come here...
Because: Life is incentives. Everything is. Politics, work, sex, etc. Banking is extememe incentives. So monkeys I ask you to explain this, because the incentive here might just be to “learn” but we all know a large percentage of the tasks, lack that very payment.
It’s interesting right? The “why?” Of it is fascinating.
Personally I work very hard. Being that I may not be perfectly self aware, I would ASSUME it is mostly because I feel that I agreed to do this and would like to see it through and then leave. But I sometimes can’t help but ask, why stay till 4
When I can just leave at 2? Will anything change? Will ppl care? Will it hurt me? After answering no to all I still stayed till 4. I wasn’t sour about it, I just did it.
Why?
Cheers and happy new year
My group at least does not hesitate to give $0-10k bonuses to bottom-bucket analysts... there is a definite financial incentive for us
Fair enough! Jeez that’s rough... If you don’t mind me asking, what type of bank are you at? I’ve heard most BB’s can’t do that. But it’s just hearsay.
Just some thoughts. 1) just like everything you do in life, do you want to be the best or the worse? Simple, when I race, although I won't win I am here to perform the best as I can. I am a performer, therefore I want to give a shot to be the best at what I do.
2)pay, as you mentioned pay varies by only 10k note that is is almost the average US household savings account (15-20k afaik). Also not that the gap widens at higher levels, touched on later.
3) promotions, some banks do A2A automatically in two years, some others only do for the top buckets or so analysts, this is definitely an incentive. Some analysts won't event get promoted at all and asked to leave at the end of their 1/2/3 year contract.
4) Exit opps, most PE funds will call your MD and ask HR in which bucket you sit. Similarly if you want to go to BSchool down the line having recommendations will be helpful. Finally you create your own performance track record. Most firms will ask your bonus as part of the hiring decisions.
5) at some point in IB seats start being selective and therefore only the top performers will get promoted, being a top performer since your analyst years will show that you are a highly committed and performing individual, therefore supporting your promotion.
I understand and appreciate the points, again I just feel that this is the hype aspect of things. I’ve seen shit ass analysts go to mega funds and really good analysts get duped last second for the associate promote for soft skill (or lack thereof) reasons.
I mostly agree and appreciate the point of doing anything in life to do it well. I think that’s where I would fall myself. The 1st point makes the most sense in my eyes.
the shit ass ones probably were doing jackshit after having signed their contract.
Office politics/culture play a huge part. I know some banks have a "chirping" culture where peers will sneer and comment on those who leave before a certain time. Think about the 2 people you mentioned in your post OP. Do you want to be known as "that guy/girl"?
It's really easy to say that you don't truly care but most people easily say "i don't care what people think of me" but act otherwise. I'm inclined to believe most people stay in the office not out of desire to be the best, but of fear of standing out negatively in any way and pursuing to be the best hedges that risk.
Sounds like you support people not having a back bone by leaving when their work is done instead of staying late for literally NO reason just so your nerdy coworkers don’t gossip about you
Oh I'm not endorsing it as the right move. I'm just noting the social phenomenon. Not wanting to be "that guy/girl" affects the bankers I know, even on a subconscious level because even people who are like "I don't care what they think of me" still feel the pressure when they don't want to. Herd behavior is far more powerful than we give it credit.
Just look at hedge fund crowding and mutual fund closet indexing, and that's in a world where people are actively trying to be different
The lack of people getting canned for performance based reasons is surprising. I know some real slackers who are not worried at all.
Bro how you spend the first two years of time go a long way in a career that will last 25+ years. If you waste your time and get a good exit opp, you can be fired, and quickly, if you do not perform. If you continue to perform, its sort of like compounding returns (you understand this, I assume), and you set up this path that you continue to achieve on your achievements. It works, trust me.
I want to clarify something here... I know this page is anonymous so not sure it matters, however, I am not a slacker. I am always willing to work hard. But when I break it down logically, probably due to a lack of awareness, I have trouble honestly articulating why I work that hard. It used to be clearly cause of fear and excitement to learn. I don’t learn as much now, and am not afraid and yet I still work hard.
Again, it’s all just interesting.
I understand the logical reasons to work hard at anything you do. Just in the case of banking work is my life so I don’t consider it working hard I consider it Being obsessed. But not sure why I am obsessed!
Weird street
Interesting discussion. I think a lot of this can be attributed to the type of people that work in IB. Most at the analyst level have been high achievers their entire life. It's kind of hard to just turn that off and stop giving a shit when you've given a shit in every stage of your life. When I got my FT offer beginning of senior year I kept thinking I'd finally slack off, but I never really could. Sure, I skipped a few extra classes, but ultimately wound up with similar grades to my previous years. I agree it is a weird phenomenon when the incentives are so misaligned, but it's also probably not a terrible habit to have.
A lifelong high performer will likely continue to be a high achiever because that’s who they are. They took classes they didn’t like and they did well, and if they end up not liking the work it’s more than likely they will continue to perform. Just a thought.
It often comes up why banks care about grades when they don’t always correlate to performance. I think this is one of the reasons other than the number of candidates.
very good point!!
Pride, building marketable skills, building a Rolodex of people to vouch for you, marginal additional pay.
Pride in what you do is hard to have if you don't take pride in how you do it
Your reputation stays with you a very long time (good or bad) and it’s small world. You might be applying for a job ten years from now and someone might do a reference check with someone who worked with you for the first two years of school. It happens all the time. Usually, you’ll be asking colleagues, ‘does anyone know this guy?’ It wouldn’t be weird to hear, ‘I worked at Lehman with him from 2004-2006. He was a strange (or good or smart or whatever) guy.
You wouldn’t want to be the ‘lazy as fuck’ guy when those inquiries happen.
A lot of times I think it comes down to basic human psychology and the instinct towards politeness and obeying group norms. If you put someone in an office where everyone else works 9-5 and keep forcing only them to stay until midnight, they're going to quit. On the other hand, if you take someone into a group where it's just sort of understood that everyone works until midnight earliest, they'll generally go along with it because everyone else is doing it.
Personally, this (clinically antisocial) guy bailed out of IB early because I thought working past midnight every night was absurd no matter how many other desperate, red-faced, glossy-eyed kids are doing it. Absurdity is absurdity.
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