Why doesn’t BofA fire underperformers?
Literally every other bank does it and coming from the inside, it is a slam dunk decision. Culling the bottom 10% or so would cut 10% of the cost with almost no loss in revenue. Leadership even admitted that 80% of the revenue is generated by 20% of the people at the MD level. At the associate level the bottom 10% are not staffed on anything because they aren’t capable of doing the work. Why does leadership refuse to fire?
This “retention based” strategy ends up backfiring because it leads to dishing out low pay across all levels and all performance buckets, so the good people end up leaving on their own. So the bank gets attrition but it’s the wrong people. How can management be this big of blockheads?
I work at BofA - couple things here:
The main reason why they don’t fire juniors is the optics. The bank overall has done reasonably well the past few years and they value their image. Putting yourself in their shoes, think about the headline “bank records record profits and lays off 10% of junior investment banking workforce.” The optics look horrible to “main street,” whose relationships are very valuable to BofA’s business model.
I share your frustration, but the tough reality of working at these big corporations is sometimes what’s best for IB clashes with what’s best for the firm, and decisions will be made based on what’s best for the firm. If you want true meritocracy, you’ll need to go to a boutique or a BB like Goldman where IB is a significant strategic priority. BofA (and other banks like them) are such big bureaucracies and are more HR/corporate driven places.
Not firing at the MD level is a different question- seniors elicit less sympathy from Main Street and I’m not as sure of the rationale. I think it’s the same general reason - the bank overall is doing well and BofA is so huge that senior leaders probably don’t care enough and don’t want to pay severance. Passively paying low bonuses without firing is a lot easier to sweep under the rug vs actively firing and creating a headline, even if it’s operationally the correct decision. Will there be a tipping point where BofA ends up retaining all the bad performers and losing the high performers… we’ll have to see. I think they are heading towards that point but the disconnect between the ground level and leadership is large.
Either way, BofA has a good brand and has some things going for it, but internally is not an efficient or well run investment bank for the reasons above.
Fair point, but then why do banks similar to BofA (Citi, Barclays, WF, etc.) fire juniors once in a while?
Another thing worth mentioning is the firm’s EGRC group. I don’t have the data but my guess is the main culprits of the MDs bringing in $0 are from that group.
BofA made a huge push to grow EGRC recently, so firing would basically be an admission that the experiment was an abject failure (which it has been, but leadership doesn’t want to backtrack yet). That could explain the difference between BofA and these other banks.
+1 to all of this - not to mention BofA has been singled out in the media for cultural issues and a death this year. This isn't 2021 anymore when every single bank had those headlines. Layoffs in IB would bring the media firestorm around culture right back. They would rather give underperformers a low bonus and encourage them to leave on their own terms.
Your true meritocracy bit is really funny. Thanks for that
They operate as a charity and won’t fire DEI Beckys
laid off guy^
DEI Becky spotted
Ever notice that the DEI complainers never say anything of use? Compare this comment to breezy443's. One offers an insightful look into what BofA is doing, including both its ups and downs and comparing it to other banks and why things may need to work differently there (whether that be for good reasons or bad). The other is the same useless, regurgitated line spewed out by seemingly every other user on this website. I've seen legitimately interesting comments about DEI and why it's an issue, like on the other thread that came up today (now in off-topic) but most of you just repeat the same garbage you've been programmed to. Get a hobby.
Why are you triggered? Clearly, we touched a nerve here. 1 more month of freeloading is all you DEI Beckys’ got left,
https://www.reuters.com/world/us/doj-v-dei-trumps-justice-department-li…
Thanks for the laugh
Bofa needs to streamline
That happens at JP Morgan too.
FIG/Tech Female Associates who couldn't hack it get moved into "Investor Relations: Office of the CEO" or something like that.
BofA now the Bank of Associates lol. Have like 60+ in some groups, many of which are awful and have no incentive to perform.
VPs stretched AF because they are pretty much the only ones that can execute and have to pick up after this mess while reporting to 2x as many MDs. If they don't pay at least market to strong performers this Feb, anyone that is good left will leave. It's a huge problem for IB and February will make or break most groups. Surprised management is completely unaware of this.
How is this any different than last year?
Last year, competing banks were not hiring. This coming year, they are. So anyone who is left actually has real options - virtually all pay way more
I think senior leadership knows, they just don’t care. The numbers look good from their perspective and until it starts to hit their bottom line, they won’t do anything about it.
They also use other reasons as scapegoats for the inefficiencies (deal teams too large, MDs giving poor direction). All of these things are true but the biggest reason for group inefficiency is the lack of culling driving the good performers out and the bad performers hanging around.
Because most of them are DEI. Wait till Trump's executive orders on Jan 21st, you'll start to see a big change of tune after that
We've already seen MASSIVE pullback from DEI post election and even actually since 2023 AA ruling by supreme court, this is the next hammer that's about to fall on DEI
Bro you got MS'd by a bunch of salty DEI hires and prospects. What a bunch of clowns, they'll be eliminated from the system soon enough
I doubt it.
The gender issue won't be touched by Trump.
I hope I'm wrong, but the issue is unqualified females, more than anything else, in my view.
Agreed - think trump will clamp down on racial quotas, which by evidence are not root cause. Instead Gender targets are the epic center of inefficiency and am not convinced they will take them on with the same level of enthusiasm. It appears that white men in power are scared of upsetting women no matter how unreasonable they get
This is what affirmitive action gets you
The hiring and continued employment of incapable DEI hires makes me want to move to an actually meritocratic industry like HF. I’m top bucket in a top group at a top bank and it’s similar with incompetent and lazy hires who aren’t getting axed quickly.
Why am I working so damn hard so I can subsidize incompetent A/As with a fraction of the output and revenue that I contribute? We get paid the same base and get paid the same bonus with only like a 10-20% differential. I’m actually getting paid less per hour because I’m putting in 100+ hour weeks on multiple high profile projects while they consistently work 70 hours doing unimportant stuff because they can’t hold the pen on real work.
If you don’t trim the fat, the C players are like a millstone around the necks of the A players. They drag everyone down.
It’s not fair to have the competent workers get grinded to the bone and subsidize the underperformance of others. This is why I’m going to leave soon.
They will not get rid of incompetent female Associates as MDs need them for their DEI targets which are baked into their performance metrics. If going gets tough, they will push out non-nepo male juniors mostly, many of whom are competent
Way too many female MBA associates (think Consumer & Retail, Tech Groups) that need to be laid off in NYC.
Lowest caliber Associate class in history.
Hope I don't get busted for posting this.
Those two groups are bloated AF. Basically no activity in the past ~3 years… no one quits because they don’t get deal experience… BofA doesn’t fire anyone… these groups have like 60+ associates with nothing to do
Commend you for calling this out. These hypocrite MDs / Group Heads have their bonus tied to gender targets so won’t hold these incompetent female Associates accountable. Banks / shareholders are suffering with unproductive teams, and several competent juniors are being forced out by HR to secure promotions for these females.
Xxxxx
Yea see these policies refuse to acknowledge the reality that having Associates/Analysts on your team that don't do shit makes life massively more difficult and agitating for the serious team-members. And often times those that don't do shit completely know they're gaming the system and focus every day on how to get away with as little effort as possible.
I just don't see why banks need these blanket policies to begin with. You shouldn't feel obligated to fire EXACTLY 10% of your bottom performers, or 0%, or any specific percent. Just pay attention to what the fuck is going on with the rank and file and give them the ability to provide feedback on staffing needs. Keeping on a bunch of lame duck Analysts and Associates is a huge liability and it sucks for the guys really cranking.
VPs are usually aware of this situation but can’t do much as female juniors are protected by MDs and HR.
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