Jamie Dimon Calls On-cycle "unethical"

It is objectively unethical. JPM also is an active participant in this. They aren't some passive victim. JPM is a belligerent just as much as PE is in regards to PE recruiting. 

This is literally Dimon saying he is a victim of a killing when PE is pulling the trigger of a gun that Dimon is holding to his head 

wondering how this will impact the incoming analysts' on-cycle. Does anyone know? 

Banker complaining that self-interest is unethical

Laughable. They could:

- Make analyst compensation more lucrative (they won't)

- Improve the lives of their analysts (they won't)

- Push back directly on the PE firms (they won't)

Instead they'll gripe about the first year college graduates who are just acting in their own self interest given the options in front of them. It's not a secret, the graduates don't want this either. But you tend to choose your best option and that's what it is. If you don't like it, there are ways to fix it besides complaining that the 22 year olds are wrong.

What's funny is, his idea on how to solve the problem (a cartel of PE firms with enforcement mechanisms) is basically the right response, but he misunderstands so much of the market. He wants schools to close off their facilities to PE firms that jump the line, as if the reason why people pick Blackstone is because they rent out a conference room in Philly or Cambridge. PE firms that come to campus do so for their analyst programs at best, and even that they do less often primarily because *banking* analyst programs like JP Morgan's decided to unmoor themselves from on-campus recruiting in ~early spring junior year to jump the line for literal 17-year old diverse freshmen (and then eventually non-diverse sophomores).

As for the "unethical" part of this...buddy, that conclusion is only true because you and Goldman have tried to gaslight the whole world into thinking your Analyst programs are not two year programs with an option to stay, like every other fucking bank frames it, but are instead blood oath-style lifelong commitments to a family. It's completely out of touch with reality. Some of the alums you are proudest of are the ones that leave after two years. A big part of your recruiting people is juniors itching for a CD&R gig.

The complaint doesn't even make sense from a business standpoint--the jobs are categorically different in many respects, it's not like employees are hopping from one pod shop to another or one trading desk to another. You hire quite retarded post-MBA's as Associates every year, don't blame kids for not wanting to be shoulder to shoulder with them the rest of their lives.

Interested in hearing everyone’s thoughts as to how this can be “fixed.” Should banks up their pay? Better WLB?

Or, should banks bully PE firms into starting analyst programs so the whole 2-and-out thing can be avoided? Just food for thought.

Objectively correct take below (if you disagree with me you are a prospect or wrong, cite your mental disability before disagreeing):

The early recruiting timeline for IB unfortunately makes sense when you consider how much people level up during the lag time from interview to matriculating at the desk. Obviously not going to pretend that success in memorizing accounting technicals is indicative of job performance, but knowing you have a spot with about 2 years to prepare and read up in advance is legitimately a game changer.

For PE / on cycle this does nothing because everyone's already in banking. All you do is select for the people willing to throw their last moments of freedom to grind enough until they can do an LBO with their eyes closed. And unlike with IB placement where although a lot of the interviews are still dumb but you still have to admit the crop of people that get selected in are definitely better on average than those that don't, this is not true with private equity in any way. Again, the current interview process literally selects for passing a basic model test that is pure repetition, and if you can sensibly talk through some deal dynamics.

Maybe he would retain more IB talent if he didn't work them to death and treat them like shit? Absolutely hilarious that instead of trying to correct the issue of having a shit workplace is to blame people for leaving.

It's unethical but not for the reasons Jamie Dimon thinks it's unethical.

Calling it unethical is stupid. Just let free market principles prevail (we're already seeing it).

If recruiting genuinely turns out to be too early, PE firms will get burned by (i) offer reneging, (ii) incompetent associates (hired too early with too few proofpoints outside college resume), (ii) turnover (from associates joining a job that they knew too little about when recruiting).

If these challenges arise, firms will pullback from on-cycle recruiting (AKA postpone hiring cycles) to avoid dud classes by providing more time and datapoints to ensure a mutual fit. We're already seeing this with the record low participation in "on cycle" this past summer with countless firms (and candidates) waiting until fall and winter+ to hire.

Soon the midwives will also be head hunters

It’s quite an amusing exchange. The whole “phenomenon” is beyond me since this isn’t happening here in Europe, but the argument of JD is truly absurd — the first thing JD or Orcel or DJ D-Sol did, was fixing their own multi-mil packages, no matter what. Often on the back of others. Orcel even sued Santander for what was is again — 70m? — and won. 
WLB is the worst it has been in a long time (ever?) and the “always on” expectation is taking its tool, as can be witnessed in the form of rising rotation.   I see this particularly among 2-6y experience roles, which are the most painful from a project mgmt. point of view. Never heard of an IB CEO take a pay cut to hire additional top talent…

Analysts who secure their own deal well ahead may somewhat “overplay” the system, sure…  but don’t be fooled: the reality is that the banks don’t give a sh*t about you other than economic output for said banks.   And given all other factors, rotation wouldn’t be any lower if PEs were “forbidden” from recruiting early or analysts wouldn’t engage… as someone already pointed out, the market will decide and if incoming associates are poor, then the timelines will be pushed back again. My two cents.

On a side note, also hilarious what level of praise Orszag got for merely saying “we are keeping 2 days WFH… for now.” 

The times we live in… 

Aside from the obvious hypocrisy given JPMs own recruiting timelines, loyalty is a two way street. You work new grads to the bone for 100hrs per week in a shitty model, don't expect them to want to stay. People and banks knowingly accept this tradeoff for 2 years from the outset; they'll learn a lot, get paid well, and gain a platform for their careers, and in exchange they work like monkeys for the banks.

When you miss out on all the MF/UMM offers but at least Jamie Dimon patted you on the back in the elevator for having "character"