Been hearing a lot of chatter on the floor about declining analyst quality the past few years. Do people actually think this is the case, or is it a myth?
My take is it could be 3 things:
1) Selection bias. The VPs and Ds complaining were the relatively high performers as analysts/associates, and therefore have relatively lofty expectations of juniors.
2) Simple human bias and a yearning for the "good old days."
3) Actual decline in analyst quality.My take as an experienced associate (ignore the username) is it's a combination of the three, but the decline in analyst quality is very real. I've observed that associates used to have the authority to demand a finished work product from analysts, and therefore could spend more time checking and thinking about what else to include in materials, making VP and D lives easier.
Nowadays, I work with average or bad analysis who pull things like lying about being jammed, disappearing for hours at a time… or some of them just plain suck at the job. I then have to spend more time actually preparing the materials, and the inefficiency goes up the chain.Have people actually observed this decline, or is this unique to me or my group?
No need for 50 pissed off analysts to reply power-tripping about how they are pushing back more, don't care about the job, etc. Interested in objective answers only.
Agreed. Very sharp and noticeable decline in quality over the last few years. Still a few gems out there who have great attitudes and do great work but the amount of brazen slacking I see these days is unbelievable at times.
Will add that there’s definitely some nostalgia and boomerism involved as well (ie it’s partially just emotional rationalization on my part) but having seen multiple analyst classes over the years there’s still a definite difference.
Also spot on about the inefficiency backing up the whole chain. Every hour the associate spends redoing the analyst’s work is an hour the associate can’t spend taking something off the VP’s plate, which continues all the way up and makes the job worse for everyone.
you can also look at the mid levels and say they are declining which is causing a decline in analyst quality due to training. When I say the mba associates I worked with are brain dead I mean it.
Agree. Many factors. We could argue the ordering of the below but in my mind the hierarchy of issues is as follows:
1) Volume - there are just a lot more analysts (and bankers in general) than there were 5, 10, or 20 years ago. This dynamic was hugely exacerbated in the last 2-3 years.
2) Life preparedness / macro trends - the average college graduate is just not as well prepared to roll up sleeves and do work today. Proliferation of colleges, majors, and grade inflation, combined with a general sentiment shift toward valuing self/time/other factors vs. building skills/network/potential has created a general workforce that doesn't have the same approach to "apprenticeship" jobs like IB as prior analyst classes. All these analysts think they're really good because they've always been told they are in school.
3) WFH - again, this is an apprenticeship job. Analysts see seniors going home at 6-7 or not coming in at all and there's both a "when the cat's away the mouse will play" element as well as just a lost opportunity to listen into important calls (which provide context to the work you're doing) or grab 5 minutes of somebody's time without sending an email.
4) Maybe I'm a boomer but the analysts are just soft now. The expectation for hours is just not what it used to be and there's no way to be as good one year in when you work 60-70 hours a week instead of 80-90 hours.
The yelling point below is valid too - you never touch a hot stove twice - but those are bygone days.
100% agree +1
I can't fully blame them, when you see every influencer, ICO gambler, streamer, youtuber, drop-shipper, and dunce with 14 braincells talking nonsensical drivel on podcasts all making hundreds of thousand to millions of dollars you get a young generation that resents the white-collar grind.
Some definitely make it and good for them, but young kids generally overlook the hundreds to thousands of hours it took many of these folks to get to where they are and focus on the end goal of making millions online and moving to LA to live the dream.
Could not disagree more on your point #4. The marginal gain in learning that you get from 60-70 hours a week to 80-90 is so minimal.
What is more important is how stressful and challenging those working hours are - are you cranking out tough analytical work for demanding senior folk under tight deadlines on live deals. The analyst that does 60-70 hours a week on that will be way ahead of the analyst working on mindless pitch deck fluff and just twiddling thumbs at desk until midnight every night.
Live deal work is the best way to learn, and, news flash, some shops you can be on a live deals and still stay under 70 hours a week and learn a lot (speaking from exp).
The framing of people valuing their personal lives more than an office job as “soft” is something else
I think the top analysts are still more or less the same quality as the top analysts before, but there's a lot more variance below that. Frankly in the last couple years there was so much M&A work banks hired a lot of candidates who never would have sniffed banking before (both laterals and from school), and the worse training only exacerbated that.
We hired an associate who was a 2nd year analyst who has been excellent. On the other hand, some of the banking analysts (even at BB's) we've been working with have been absolutely terrible.
I am hopeful like many of the other trends with COVID, which people thought were the new normal, it'll all swing back closer to what it used to be.
Wow and I’m out here studying 24/7 to try and get an internship in banking
If you ain't target, you ain't getting easy route bud
I would say it's definitely a decline but it stems from two gating items: a decline in broader academia and workplace culture. Middle school, high school, and college have all gotten much easier over the past 2 decades given emphasis on leaving no one behind and funding being correlated to school performance. So students think they are better than they are. The second is probably more relevant: work place yelling. 20 years ago, an MD or VP could openly yell at an analyst and it wouldn't be looked down upon. If you do that in the middle of the floor today, you'd have an HR violation. In short, there ins't enough disciplining towards the middle performers/low performers to literally make them do better. Also a change in the cost of housing/cost of living has made it less luxurious to be an analyst, but I think the former two are more relevant.
20 year cultural decline but like actually yelling but maybe housing...
It's 100% a cultural change in the office that is impacting people's performance. If you were nervous to make a typo vs being confident on pushing back, the results are much different. I said housing is not as relevant but if an analyst is going back to a shit hole and sees their savings be $4 at the end of every month because of inflation + high housing, yeah they might not want to stay until 4am because the money isn't there for many many years. But as I said, I think this is not the main cause.
I would agree in some sense that analysts (in my limited experience) might be less disciplined now than before bc of changing societal standards, but if your solution to that is “let’s just start yelling at them again!” then I’d say that’s a pretty lazy and shitty approach.
Much better ways to instill discipline in someone than demeaning them publicly.
To expand on your first point- I think it has become increasingly hard to know if you’re recruiting a good analyst or not. Not trying to gatekeep at all (especially as a non-target), but when all of the resources for getting into IB are as accessible as they are now, you have a lot of kids who know exactly what to do extracurricular-wise and say in interviews.
in the past the guy who had a bunch of finance clubs and competitions on his resume was more likely than not interested in the space and spent a majority of his time with those activities; nowadays you read a guide your senior year of high school and gun for certain positions in college to tick a box for a resume. Professional clout chasers are more popular than ever, partly because students during COVID realized they could cut corners and still get where they wanted to be. Both of the analysts in my group who dropped after 6 months told me straight up during training that they liked IB because “it was the best finance job.”
I know I sound like an angry boomer, but now I have to cover more bullshit because people took a job thinking it was a 9-5. Even funnier is that I’m already seeing clueless sophomores being pushed through the process
This is super interesting, I feel like the world for young people has gotten super competitive in general in pretty much every way, and this counterintuitively could have contributed to quality decline. Overall, from data and anecdotally, I think kids have much more of a pressure to perform and 'achieve' according to societal standards. And made super aware from a young age how important this all is towards being competitive for jobs in the future.
I remember my teachers in high school telling me how they got into schools like Cambridge and Oxford with a B and two Ds at A-Level (equivalent to a trash GPA nowadays, even factoring for grade inflation). Now you might not even get admissions interviews with 3 or 4 A*s. Same goes for jobs, employers used to be so much more open to hiring people who lacked the hard skills or maybe had experience in another field, but showed interest and promise, and it didn't used to be so hard to differentiate yourself from other applicants by preparing really well. Now finance employers have so much choice of polished resumes straight out of undergrad that those sorts of people wouldn't even get interviews. And I think so many people push so hard on academics and extracurriculars now, not because they have found something that they enjoy or have a genuine interest in, but because they are doing it for the reward. And it's not like that's irrational, in the past you could do reasonably well / coast when you were young and rest assured that you could land a job at a big company and be given opportunities for advancement. Now jobs at big companies are split into two classes; the majority who will rarely who earn minimal wages and will likely never be promoted, and the minority who are fast tracked and come from prestigious backgrounds. So this puts a massive pressure to 'succeed' in high school and college in order to start in the latter, at the expense of finding a genuine interest.
Add to that that the high awareness of IB career paths and exit opportunities, and you can imagine there has been a huge rise in high achieving college kids who choose IB because it pays well, offers accelerated career path / societal success, and with the full awareness or intention of leaving after a couple years - who therefore are not as committed to their firm success as analysts in previous generations may have been.
I think this is such an underrated point. Recruiting has needed to change with the times and it hasn't. The barrier to learn the... "bare minimum" to sound competent in an interview has declined substantially. Basically everyone who would be considered for a role will know the basics. But recruiting hasn't adjusted for this, at least not in America.
While employees are responsible for their behavior, the company is responsible for hiring. You can either change the hiring pool or you can change how you hire. Hint, no business or industry can change the hiring pool in the short- or medium-term. So if employee quality is a problem for your business, hiring better will be a far faster way to actually do something about it. And when it comes to finance there are so many better ways to improve the hiring process.
college admission isn't easier today....it's much hard than 10-20-30 years ago. especially at the elite schools.
well I know you didn't go to a target school because I said nothing about admissions... I said passing rates/GPA inflation. Tough look for you VP.
Fact. All the smartest kids are applying to Big 4 now.
All the smartest kids are quants making 4x the money and working half the hours, let’s not kid ourselves
Probably true there's a decline in analyst quality just because ib is no longer the highest rated/best industry to go into coming out of college. If i was a top tier college student with a great work ethic, great attitude and was super smart, I'd much rather go into tech/swe with better wlb and higher pay. No point taking lower pay for longer hours if I have the choice between the two.
Who in tech that's not a founder beats an average PE professional at 30? 650+ cash comp plus 4m+ carry that's probably couple years vested already. That rises exponentially by 35 where cash is maybe 1m or higher and carry likely triples
Username unsurprising…
Count the number of tech ppl vs the "average PE professional" and you will see why there is a higher wage for VPs + Partners in PE. The simple fact is that ppl care more about their lifestyle and spending time with their loved ones rather than stressing over work.
I'd say facts, and there may be some good reasons for that.
1) Lower salaries compared to other available paths that require fewer hours; or lower salaries compared to pre-2008, so less talent wants to join IB.
2) Many MDs and VPs WFH, so juniors reciprocate with less effort.
3) Lower attention span because of the constant dopamine bombardments and distractions, which impact one's quality.
4) More interest in finding "purpose" or "fulfillment" in life, so less emotional investment in a job.
5) Change of perspective on what financial freedom means (older generations were more materialistic and more dependent on IB salaries, newer generations are more frugal, so they don't feel as tied to their jobs).
6) Even the exit opportunities argument to push someone in IB sounds crazy. If you have no idea what you want to do, just focus on whatever is now hot in the economy (e.g. tech or start-ups), and once it declines (as it does now), then you move into the next hot thing. Repeat that until you become a millionaire.
Still, to defend current analysts, older generations shit on newer generations, so sometimes those claims may be highly exaggerated (proof). Many analysts are better than older generations because a lot of information and resources to prepare for IB became widely accessible, but no one seems to discuss that (maybe because of insecurity or arrogance?).
Anyway, don't forget that there are also a lot of incompetent ASOs, VPs, and MDs who were promoted only for being in the right team or a boom cycle, so their incompetence could directly affect analysts.
One aspect I don’t think is being addressed is change in client demands and the ASAP nature of our deliverables to clients stemming from that pandemic flurry. It’s more difficult for a fresh analyst to step into that email/call barrage and be left alone to figure it out and carry out the work independently. Sponsors/PortCos are way more demanding clients and strategics are barely doing deals, so it’s like akin putting someone who has only topped out at 30/mph on a treadmill that is going 100/mph and expecting them to figure it out. It’s tough to train and review when the difference is a 11pm night vs a 2am night.
I think there is definitely a noticeable downward trend but I don't think it's the candidates' fault, I think it relates to the major shifts in on-the-job training. Candidate quality (at least on paper) is as strong and competitive as ever.
One example - Pre-COVID there wasn't zoom so you'd have the whole deal team huddled in an office listening in to various calls. I actually think this was really valuable because you could mute the line and the seniors/mid-levels can actively explain things as they are happening. Now, even with everyone in the office, people just work from their cubes/offices and the juniors don't really get any of that active commentary. You definitely don't retain information as well in this format and you probably aren't actively taking notes or even worse working on something else entirely.
Another example is that there is just so much less collaboration between analysts themselves and also analysts and associates/VPs. Again I think the zoom culture has discouraged sitting down with people at their desks and working through things. Now everyone pretty much goes home at 6/7pm (which don't get me wrong, I think this is a good thing), but once you go home and start working you are kind of on your own. You can't ask your associate or fellow analyst to come to your desk to work through things so if you get stuck you'll probably end up sending something up the chain that is wrong, which contributes to this cycle of mid-levels not thinking analysts are competent.
Yea, this is good. I've read a bunch of comments and want to add my 2 cents:
1. The acceptance of "WFH when you can" culture. When you have the opportunity to go home at 6, 7, 8 (and expectation), the focus is getting your work done as quickly as possible (even if quality isn't as good) rather than diligently getting work done and learning, printing out your work to check, tick and tie, etc.
2. Connected to the above, the training from the mid-level. Similarly, if a mid-level can get home at 6, they're focused on getting their work done rather than training (so that when they get home they can just do emails rather than actually work). Someone mentioned above it's tough to train when that's the difference between an 11pm night and a 2am night - totally agree, but that was the expectation. It just isn't anymore.
3. Someone mentioned dopamine hits from social media. Very true.
4. Generally less of a focus on the long term. I see fewer young folks in the office talking about climbing the ranks and what it takes and more of them looking externally (i.e. let me make what I can for now but long term I want out of the industry). As someone said, maybe there's less focus on material goods. Or maybe there's more hopelessness because of how much less affordable the "wealthy lifestyle" seems. Also may be because they see a lot of young-ish but senior folks, meaning less room for them to move up. If I'm 23 and I see a huge amount of 30-34 year olds doing well, then what room would there be for me to break in at the senior ranks? As someone said, less emotional investment in the job and less pride in one's work
5. Someone mentioned "yelling" culture. I'd put it another way, which is a huge focus on allowing analysts work life balance. That used to never be talked about. The expectation as an analyst 1 was going home at 2am on average and weekend work (typically one full day and one day with a few hours to clean up). The reciprocity was training from the mid-level / senior folks. If you're now told it's bad to keep analysts late, then how are you supposed to sit with them from 6-7pm to talk through a model and how the deal team is thinking through something? It's created a culture of just getting the work done with no training. In addition, it is very hard to express disappointment in someone's work. Not impossible, but between the increased HR-related sensitivities and 360 reviews, it generally feels like giving direct negative feedback has more downside than upside
In 2023 it’s very difficult to tell an adult that he/ she “isn’t allowed” to leave until 2am for a whopping $150k total comp.
Same reason minimum wage workers nowadays seem increasingly terrible - they simply do not get paid enough to care.
Analyst position is like the top-tier McDonalds cashier. Low skill requirements, the most BS of any position, AND get paid the least. There’s too much information accessible to buy into the nonsense.
Just message them on Teams, call them, and share your screen
I think it's (1) generational- and (2) macro-driven.
(1) According to the first article on Google, 42% of Gen Z's in America are depressed, compared to 23% of Americans over the age of 25. The single biggest factor I've noticed in analysts / juniors is just not giving an f*** about work in general. I don't think it's right to say they're less intelligent (more on that below), but just have a hard time working hard for 12+ hours a day with the ADHD brought on by rampant anxiety and depression.
(2) Every business program over the last decade has reported lower interest in banking, in favor of tech or consulting. If you can solve for "analyst quality" as the "equilibrium price" between jobs available (supply) and potential analysts wanting those spots (demand), it's pretty obvious that lower demand means lower equilibrium "analyst quality"...
80% boomerism 20% fact.
Too much information about the job and alternative career paths out there to make anyone give a flying fuck about being an analyst. There are 14 year old Fortnite players making more money than a lot of MDs.
Also, no one talks about the slew of complete garbage associates and VPs. These are the same hardo colleagues who think they were a stud analyst, yet when you ask their former VPs and above it’s only horror stories.
It might not account for the entire effect, but I cannot be convinced working from home is good for junior bankers at all. It is so essential to be in the office gaining direct exposure. Such a stark difference between the bank where I interned (fully in-office in 2019) and where I've been full time. Used to be able to speak with anyone on the team all day and overhear interesting calls, client meetings were a dial-in that we all sat around, and we rarely had to email each other during the day. Now at my current bank, MDs and VPs are rarely around, I've never worked face to face with anyone, every meeting is on zoom - even internal, every deal is spread across the two offices, you never meet your deal team, and nobody comes in on Monday or Friday. How are you supposed to learn the same skillset that bankers learned in 2019? It seems like the job changed a lot
The email traffic is crazy now. I'm with you on that. Used to just talk to people. Now you email, "hey are you free to chat," they aren't at the moment and it's 5 emails back and forth to see when someone on your team is free
Email to ask if you're free to chat? You guys don't have an IM system?
Surprised nobody has mentioned anything about diversity recruiting yet. Banks have made a marked effort to create certain gender/racial quotas for intern classes which feeds into the analyst program. Hard to dictate a 50/50 gender split when the applicant pool may be as high as 80% men without sacrificing quality of final class. Similarly hard on the racial quota side for obvious reasons
Edit: I request that individuals who have participated in diversity programs refrain from voting on this post
Based. Lol everyone tryna avoid the elephant in the room to remain politically correct.
There's a good reason people don't talk about it: it's not the main issue. Don't get me wrong, I'm not here to dodge the truth about diversity hiring. Any time you hire using criteria that is unrelated to the job, you lose some quality. That's true by definition.
But that's not the story here. Diversity hiring is older than this story. There is more recently a bigger issue about (i) generational change, softness etc that's affecting every professional service firm and (ii) and additional hit to IB which is talent drain to other industries.
You watch too much Jordan Peterson. That line of thinking only holds when you scale up the number of people you're talking about and the technical skills required to succeed in a job.
Yes, when you observe the distribution of "skill" across a large population set you're correct. Mathematically, you're lowering the quality of hires when advocating for something like 50% DEI quotas for all engineers. But that's primarily a function of 1) The sheer number of engineer slots in the job force and 2) The technical competence required to be considered a "top tier" engineer.
In an industry like IB, there are far fewer Analyst spots than in the engineer example above and the technical skills required (you'll realize this soon enough, AN1) to be a competent analyst is far below that of engineers.
I don't believe this to be accurate. If it were, then the final analyst pool would not have a segregated "skill" distribution, however, we know that is not the case. In every single analyst class, the diversity kids are generally not the ones that end up being the top performers. Agree with above point that diversity recruiting is not the only cause, but I think we need to stop pretending that kids hired through a special easy pipeline aren't inherently lower quality
Since you brought up gender, what percent of the non-males are not sufficiently good enough to get hired but for them not being men? What is the number? While I absolutely don't expect one specific number (ie - 32.54857%), since you are speaking so authoritatively you should be able to quantify this.
Or are you just making things up?
I think he was just using 80% as an estimation. You're kidding yourself if you think there's an even split between gender of applicants. Look around any finance related class at your school and see how many more guys there are than girls.
first thing i thought of but not trying to get blocked by WSO Mod
If you read the comments of the more senior folks on this thread (i.e. people who have been in this industry for at least a few years...), diversity sincerely is not what comes to mind first. Diversity hiring has been around much longer then this trend in analyst performance and it's always been a given point of controversy in the recruiting process. Analyst classes have been targeting 50/50 gender splits since at least 2015... What's new this time is the overall change in attitudes towards hard work, high performance, and "grinding" - for better or for worse.
Frankly, from my perspective, the reason why diversity is not talked about is because it really isn’t the reason that comes to mind… diversity recruiting has been around a lot longer than this change in analyst quality and that’s always been a point of controversy. What I’m noticing is definitely observable for the non-diversity hires. As mentioned above, it strikes me as much more of a generational attitude change. Less of a grind mindset and just general apathy towards high performance.
As others have said, zoom/Covid were probably terrible for industry talent in the long run.
Others have made great points already on the analyst experience (MDs never in office, everything on zoom, less emphasis on mentorship), but that works upwards as well.
Senior associates / VPs now have spent the past few years WFH / stuck on zoom as well, and I personally think that they missed a lot of the mentorship “learning” as well. When I interned not only would a VP huddle up in person with an analyst to go over a model, but an associate sitting nearby would sit up and pick up on that. That wasn’t the case the last few years, and even when good VPs/MDs took the time to teach analysts stuff, it was probably on zoom and not as visible to up and coming mid-level bankers.
Also +1 on the idea of cross-office staffing - used to never be a thing, but Covid made it easy to have an analyst in NY, an associate in SF, and a VP in London. Lots of banks are still staffing across offices even now, which makes return to office a waste and keeps stuff virtual.
I also think this all starts at the top, and Covid made it way easier for MDs to more efficiently block out their time. Used to be that for a pitch it would be a multi-hour affair in person - MDs would be in the office late preparing, travel to the pitch (often with the full deal team), and that was their focus. Now an MD can do 3 pitches and 6 other intro calls in a day and their entire calendar is booked 9-5 with zoom calls. This is great for MDs and let’s them do prospecting work much more easily. On the other hand, it Just takes away a lot of the experience of an MD saying “we’re going to Ohio on Thursday for this pitch, let’s all get in the trenches together to finish it up, meet in the hotel lobby the morning of to prep, and do a debrief in the airport after the fact to talk about next steps”
wow you actually worked hand in hand with MDs? lol
Holy shit shit it breaks my heart to hear these lazy target school kid’s who simply were admitted because of the school associated with there GPA.
Firms are soon going to realize that the academic prestige associated with target schools means so much less than it did a decade ago.
Non-targets with ethic are about to push an entire generation of lazy targets into extinction.
Inshallah
inshallah. if HR gave me full reigns for recruiting i could create the next Centerview. team would look a lot like the one from Dodgeball
Yup and I am just learning about grade deflation at targets. You will always be preferenced out from a top target (applies to those with no IB background whatsoever) even if you got that dog in you grinding at boutiques or no name shops.
It amazes me when people complain about the quality of their entry-level employees but they keep on using the same hiring processes that led to their hires in the first place. I guess intelligence, or just basic thinking skills, really isn't required for banking.
Hell naw non targo- go kick rocks at the 7/11
nvm im just too jaded
100% fact.
While people don't like the CS vs Finance discussion, it does have a huge impact on the quality of candidates that go to banks.
https://www.thecrimson.com/article/2017/11/6/concentration-data-analysi…
This data is a bit old, but the trend most likely continued to grow into 2023. The brightest always went to HF or PE straight out of college, but you see more of the middle 80 percentile go to tech. Maybe the trend reverses a little with all the layoffs but I doubt it. Banking isn't cool anymore so it's always going to seem like the 2nd or 3rd choice for people, and they aren't going to work as hard or have the ability to do so
I'm kinda shocked that no one has mentioned the COVID impacted college experience for analysts that joined these last few years. I think that's also a massive driver of the lack of interest in working. Can you imagine going two years of not having to leave your dorm room outside of eating, laundry, and social reasons? All your tests and quizzes are easy because you are in a dorm and have access to the internet, etc.. they essentially had pivotal years where you learn to be fully self sufficient and actually learn / hone in on their interests stripped away because they could just skate by doing the bare minimum (and most of them chose to)
Because of COVID, I had 2.5 years of college where I did NOT have to apply myself... and getting back in the habit of having to work hard and actually think is regretfully not easy
This is a fact. Major reasons —top talents have other choices than banking. Straight to PEVC, proprietary trading, quant research, even Tik Tok influencer — all of these places make more money than ibanking without the wlb sacrifices. Other people have also mentioned tech, but tech isn’t worth it IMAO
do you really think recruiting for banking is competing with tik tok influencer career path?
Yes I do. The special thing with Tik Tok influencer is that there’s absolutely no structure / checklist for who makes a good Tik Tok influencer. A college student sharing their life at HYPSM in the form of Vlog — that is influencer material. An attractive and sporty college student posting snippets about their Spring break trips — that is also influencer material.