Poaching junior analysts / hot job market?
Full disclosure: I'm a reporter for Bloomberg News, the one who has been writing about banks raising junior-banker pay to $100,000 as of late.
I've been talking to recruiters and they say the job market for junior analysts is busier than ever. One told me it's the busiest he's seen in 10 years. Another told me that PE firms are now swooping in to lock in job contracts with junior analysts during their first month of work - before they have any experience - whereas those firms usually waited until analysts had at least completed their first year. But because the demand for analyst skills is so high, competition is getting worse.
Poaching is rife and junior analyst skills are high in demand. Bidding wars are real.
And junior analysts (or at least the new generation of them) have undergone a cultural shift - no longer are the days of working long careers in investment banking. Instead, I'm told junior analysts come to the banks to get the experience/name recognition from the IB but get out ASAP the second a PE firm, hedge fund, or more increasingly, a tech firm, swoops in offering bigger salaries and better perks including better work life balance.
SO I'M WONDERING - what are your experiences with this? Is it true? Is the job market better than ever for junior analysts right now?
And are analysts looking for higher paychecks elsewhere? What's the general sentiment? Is there any loyalty to your employer anymore? And just how worried are banks about losing their junior analysts?
Have any of you been engaging in bidding wars? Are you being approached by different firms with job offers? Are head hunters contacting you?
Have any you left IB for a job in tech or another financial firm after two or less years at the bank? why?
Prefer poached egg but will try poached jrs too
I hit the desk a few weeks ago and thought I saw myself in banking for the long haul, I had no intention of leaving anytime soon.
Now I haven’t gone to bed before 3am this month, I’m 22 years old and I saw my first grey hair, and I hope I get struck by lighting every time I hear a phone buzz.
I think I’d take a job as a McDonald’s cashier if someone offered it to me right now and it’s only been a month… a 10k raise just isn’t enough to subject myself to this.
Market is on fire as 1) deal market is so hot due to a) spacs b) low rates c) senior bankers chilling at home all day being able to book 15 back-to-back-to-back zoom meeting with clients 2) overworked analysts leaving due to the hot market, and seniors demanding so much work b/c they’re sitting at home all day 3) GS13 and wlb initiatives, banks are giving out tons of bonuses and salary increases to analysts, a few extra analyst salaries & bonuses per class isnt that much more comp expense in the grand scheme of things (and can afford this with deal fees through the roof).
Therefore banks are hiring at a record clip. I’m coming from an unheard of bank and in my lateral process from what I read on this lovely site and anecdotally I was told only people from name brand middle market banks could go to an elite boutique / bulge bracket and was told to focus on middle markets cause they were the only firms who would take me. I recently landed at a bb with 2 upper tier MM offers (HL / Jeff / HW / WB). Even friends of mine in private banking (wealth management) are landing bb capital markets interviews
Pls keep pumping out articles about overworked analysts and our horrible lives so we keep getting pay bumps
Sorry for the long post
Some banks (Goldman, Morgan Stanley, Moelis, Lazard) have not raised base salaries yet so apparently not everyone is feeling the pinch so acutely (I left out Evercore and PjT since they had higher base salaries to begin with).
It’s very common for analysts to leave within their first two years, usually in the second though rather than first (unless they just are burnt out and legit cant take it anymore). At my bank (one of the ones listed above), I’d estimate about 25% left before the end of 2 years.
For people who leave after 2 years though, they generally take a pay cut relative to staying in banking so I wouldn’t consider it a given “people are leaving for the money”. Ballpark average private equity associate money is $250k all in while an analyst promote to associate could clear more than $300k at many of the “elite boutique” banks their first associate year, especially when including promotion bonus
Exits to private equity are Probably driven by combination of desire to get out of a client service role (and be the client), the general perception the Buyside offers (relatively) better work life balance while still making great money on an absolute basis.
People who leave for Corp dev generally have a much better work life balance (wlb) but take a much bigger pay cut relative to staying in banking. Again, still great money compared to most other jobs though, and if the work is still interesting and the role / lifestyle more sustainable, that makes sense for a lot of people.
Seen other strategy roles at corporate places / startups of various sizes too.
Hedge fund exits generally have much more variable compensation and less stable employment but it’s interesting work and also generally more predictable schedule than banking / the grind of closing a deal in private equity, so it suits certain personalities coming out of banking. These exits are generally less common straight from banking than exits to private equity, from my experience, but still relatively common
Goldman saying they don’t want mercenaries, for example, who are only there for the money should reflect on why people choose to sacrifice years in their 20s giving up essentially any social time / holidays / weekends / health considerations/ damaging relationships
If banks want to stem the bleeding they should take a look at the incentives to enter banking in the first place and why people are leaving. I think people come to banking for the money and also for the doors it opens. To
Incentivize people to stay, they either need to pay up (making the benefits of leaving not worth it) Or improve the WLB considerations materially so people don’t require the same monetary incentive to stick around.
An interesting comparison for an article might be the cultural / managerial
Differences at investment banks and big law firms. Lawyers get great (lockstep) pay and are in a demanding profession too, but the law firms seem On average to have much better cultures and great benefits (including vacation people can take, parents leave for months that people can actually take without penalty, no “bed checks” at the office, etc). Big law has received 3 extra covid / retention bonuses in the last 12 months plus raises of ~$15k.
Why can’t banks replicate a similar culture / suite of benefits and WLB principles as their closest peer high performing client service industry?
"Why can't banks replicate a similar culture / suite of benefits and WLB principles as their closest peer high performing client service industry?"
Because a lot of seniors in investment banking are truly incompetent from a people/culture/talent perspective. They only know 1 thing and that's deals, so by reducing hours it leads to less deals and less money.
Not going to happen
I would add that pretty much all finance jobs in “high finance” - call it IB, PE, HF have historically faced almost zero competition for junior talent from other industries. I would argue the best and brightest now don’t want to go into finance (look for yourself at mba placements over pay two decades). I asked the head of hr at my old firm what the bank was doing to make us more competitive with technology firms for junior talent and she literally said word for word “why would anyone go work there”.
the biggest issues right now in the industry are outdated philosophies and backwards cultural principles which has led to toxic workplaces. You can see Goldman’s current ceo as the perfect poster child for such poor mismanagement.
For banks (and pe firms for that matter) to win on junior talent again, they have to either:
1. Raise compensation to pre-2008 levels where associates were making 500k or
2. massively change the culture within banks and fire even rainmakers who are assholes to junior staff
Given the way the business works, they will increase pay until they have the retention they want. No way they will ever change the culture