Poaching junior analysts / hot job market?

Several headhunters contact me per week. I don’t necessarily reply as I don’t have time to interview. However I plan to leave before the 2 year mark as working past midnight every single day simply isn’t sustainable. 

nothing wrong with my employer specifically, people are actually very nice, but the industry culture and workload is just ridiculous. 1/2 of the non- AN1 juniors at my firm moved to PE/HF over the last 2 months. 

The job market is indeed hot right now. I have headhunters reaching out to me 2-3 times per week for potential corporate development, private equity, or lateral IB opportunities. I've also noticed a strong uptick in the volume of undergrad students reaching out to have coffee chats and learn about IB. Seems like finance in general is hot right now, and employers are all looking to fill seats due to growth/turnover.

In parallel, U.S. consumer prices have increased 5.4% in June 2021 compared to last year... Real estate prices are peaking. The average U.S. citizen is getting more and more leveraged. There's a global shortage of Rolex. Feels like everything is overheating, and I have a weird sense of déjà vu.

No one is hitting me up for a job lol

Haven’t gotten any outreach. Every process I’ve been a part of was through “word of mouth” or HR asked internally for their analysts to make referrals. Nothing from PE or headhunters. Also i dont have a linkedin so idk if that matters. Am at top bb now

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.

The market is very hot for trained talent. I know someone who had 4+ offers in a week as a lateral hire. 

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?

mab2442

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. 

Other way around this year. Typically "on-cycle" happens between September-December of an analyst's first year (they start around June/July) but with COVID the PE firms have yet to truly kick off for 2020 hires, except for some one-off smaller firms. The hiring boom is mostly on the banking side and not PE.
Bidding wars are real. Not really, very rare for analysts. More that some banks have raised base salary and some have not, so you have offers going out with far higher guaranteed comp because certain banks haven't followed with pay bumps
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? Yes. Anyone with experience can land at a top bank like GS/JPM/MS, previously these spots were extremely limited.
And are analysts looking for higher paychecks elsewhere? What's the general sentiment? Is there any loyalty to your employer anymore? There's a lot of distrust towards these banks after months of empty promises. Juniors and even seniors (VPs through MDs) have been underwater with work since last summer and the banks have done little to fix it. The pay raises help but aren't addressing the huge shift in work culture and expectation that you're online 24/7 that has happened in the last 18 months.
Are you being approached by different firms with job offers? Are head hunters contacting you? Not an analyst and I get 3-5 HH emails a day. Typically shitty jobs, at least 70% are for lateral positions at another bank. These banks rarely used headhunters to get lateral talent (expensive and juniors usually apply on their own) and now it seems like every single opening has multiple headhunters recruiting for it.

I have just recently started (less than a month) and have been approached for by a few HH's already- have also been sending my resume out to some funds and have taken a few interviews so far/in the process.  I work on the capital markets side and we have not received any increases in pay yet, and seemingly are not a priority for the bank anymore, so I will be aggressively trying to move on to the buyside.  Its unfortunate because markets really carried the banks throughout covid, and arent really seeing any goodwill from that. 

I dont see myself staying for more than a year, preferably less than 6 months.

I’ve been getting interviews within minutes of dropping my resume on online portals. No need to even network. Have had to stop applying to places because I can’t keep up with the interview requests. 

No longer in banking, but market is similarly hot in consulting. BCG raised comp last year, which means bunch of others followed suit (at least partially) and or paid retention bonuses and the like. And plenty of people hopping from one shop to another.

Happy to chat more via PM — I left banking a year ago for PE and know for absolute certain a large number of soon-to-be-second-year analysts at my old bank are planning to leave either i) the second their bonus hits or ii) if said bonus isn’t comfortably 6 figures. In the former instance, it’s because WFH demands have been ridiculous, in the latter, it’s because they can easily go find that comp elsewhere if they’re willing to put up with said demands.

Regarding PE, this is actually the first year that new analysts weren’t swooped up within months of hitting the desk. COVID + a detente between the big firms have seen ‘on-cycle’ pushed way back. I had a job for 2020 in October of 2018 — they’ll have to wait until ~Fall 2021 for 2022.

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 

Definitely a ton of competition for junior roles. Look, the primary reasons for going into a junior banking role are 1) money 2) being around a bunch of really smart, motivated young people. With covid, we got no exposure to our peers or to seniors due to WFH but we’re expected to work even harder because of increased dealflow. Sacrificing our 20s isn’t worth it without the face time. Additionally, all of us are buddies with our friends in consulting and tech and can see how other industries treat people. Consulting offers lower comp but better WLB, tech offers similar or superior comp with almost all of it in salary with better WLB. Frankly, it’s absurd to me that some banks haven’t raised their salaries yet given the dynamics of the market at the moment. Many banks are bleeding talent. I know that a significant amount of people at evercore & GS have left in recent weeks/months. Goldman industrials NYC in particular is known to be a sweatshop with very, very serious junior attrition issues. You also have significant movement at the bottom end of the market (HSBC/TD/ other tier 3 firms) as junior bankers look to move upstream. Haven’t heard of too much attrition at the smaller EBs (PJT/PWP/Centerview) as the pay is good and seniors seem to be more understanding.  

From my school, when I was a freshman all the top kids went to Goldman with the occasional superstar doing bx PE. When I left school, all the top kids were aiming for PJT/Evercore due to comp and perceived superior culture with the occasional monster doing bx pe. If banks want to solve the juniors issue they need to 1) raise pay 2) give us actual vacation where we can unplug for a bit and 3) enforce protected saturdays. From my seat, I think that guaranteeing saturdays is unrealistic for most places given power dynamics between seniors in FO Vs BO roles, but increased pay and actual vacations should be executable. Look, this isn’t the 80s and I didn’t have a single friend out of college earning below $100k TC despite being the only person in my friend group working in banking. There are a lot of options for people coming out of school. Even if you had like 100 analysts, raising TC $15k only costs like $15mm which is a drop in the bucket relative to the size of the comp expense for this firm. We aren’t asking to be paid ludicrous amounts - we just want to be paid in line with other opportunities. 
 

Also, heard thru the grapevine that Goldman will be raising base to $100k in mid August after an internal meeting on junior attrition. Total hearsay though so probably don’t publish that. 

Just started FT at GS here in Europe last Monday and 5 days later had my first call with headhunters for PE MF. Seems like the process has moved to an insanely early point, we haven‘t even finished training yet..

Job market is hotter than ever. We literally can't get laterals in the door fast enough, and from what I hear, it's super competitive.

All analysts in my class looking to exit; most to PE, 1 to HF, a couple to Corp Dev and 1 undecided (but def exiting).

Bank is trying a mix of $ cash and perks to try to retain folks / remain competitive. The cash is obviously nice, but I feel like just keeping up with inflation at this point. Some of the new initiatives and productivity tools are great - just wish they would have implemnted them sooner...

Overall, we all knew banking would be a lot of work, but once you're in the seat it's hard to reconcile losing years of your 20s when there are comparable opps that allow you to still have a life.

I would say Job market is hotter than ever for laterals. In my group, most of the poaching is going on from other related financial positions and related firms (Rating Agencies, Big 4, law firms). Out of 12 people who started banking in 2019, 3 remain in banking altogether. 6 went to PE (primarily MM) and HF, 1 went to AM, 2 left finance. I'm currently trying to leave banking though I started during COVID. Just a lot of us realized sacrificing your life for working ~$30/hr, 16-20 hr shifts, isn't really worth it at the current pay levels. A 10k (after-tax) raise still doesn't cut it, because the work is just that demanding.

I haven't been approached by any HHs except for one which consistently reaches out to me and I've been told they're garbage. The descriptions of the opportunities seem nice but they always want an immediate start so Im thinking they're doing crap research on who I am as they don't know I just started.

Should I reach out to other HHs? Should I inquire about the opportunities for an immediate start? I have 0 deal experience so far.

best time to lateral is now

Being done with the really gruesome hours, I have lateraled to a MM with a a great culture last year, which was extremely easy (coming from a lower BB). Last year the amount of pull from recruiters was high, however, even being at a smaller firm now I am probably getting 2-4 inbounds a week from HH's for BB's and EB's. 

There has been tons of analysts and associates who have quit this year, with WFH having pushed them over the edge. Besides the long hours, and the MD's who want you to be glued to your desk 24/7, most have really lacked the comradery that came with being in the bullpen (one of the few nice things about the job as an analyst). The large outflow has caused a huge demand for trained analysts and associates, which has led to the perfect storm for people who want to lateral / move to a bigger firm right now. 

Just lateraled to a MM bank a few months ago. Think I can lateral to a top BB/EB at the 6 month mark?