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Message boards like Wall Street Oasis and Reddit continue to be lit up with complaints from junior analysts at investment banks about long hours and the resulting impact on mental and physical health. They are asking their employers to support them better.
Those demands came back into focus after news that an associate banker at Bank of America had died suddenly in March. The tragic death of the employee, a veteran of US special forces, has not yet been specifically linked to overwork. But reports mentioned intense 100-hour weeks leading up to his death.
Discontent cannot be separated from what happens at the top of the food chain. Pressure is also mounting on partners and managing directors to kick-start work that keeps younger staff in the office all night and on weekends.
This pressure may not garner much sympathy given that these high-level financiers can make millions. But some bankers say the seemingly glamorous job of setting up planes and managing boardroom intrigue has turned into more drudgery than ever. Employers are demanding high fees while offering less patience than ever when they underperform in any given year.
With that kind of sword hanging at the top, there seems to be no choice but to force everyone below to fight harder. Firms are just crossing their fingers in hopes of avoiding a bad incident that ends up in the headlines and spoils the impression that Wall Street has become a kinder, gentler professional in modern times.
Three years ago, amid an all-time pandemic bonanza, investment banking analysts complained of overwork and a lack of compassion from their bosses. After the backlash, they won big raises, new benefits and alleged burnout safeguards, including active efforts to monitor and limit hours worked.
Complaints have now returned even as the stores have disappeared. A lack of initial public offerings and mergers and acquisitions led senior bankers to make more offers. Banks maintain various types of customer relationship management software to track such diligence. Some go so far as to add up email activity, calendar entries and phone call records, one top banker said.
“It’s really the pitches and the PowerPoint work that take up a lot of time and expanding the compilations [typing company financial data into spreadsheets] and that,” said one investment banking analyst who questioned the effectiveness of the marketing efforts. “I would also be interested in the data on the number of candidates per year and the seats won.”
Some banking executives are already thinking about how AI can be deployed to reduce costs and workloads, but staying top of mind with clients remains a priority, even if no particular workbook is that useful. One longtime banker who now works at a Fortune 500 company said that clients are less loyal than ever and demand far more marketers.
Another veteran banker-turned-chief executive said that while some banks such as Credit Suisse and Lehman Brothers had disappeared from the landscape, the business remained intensely competitive. In addition to the rise of boutique firms, perennial also-rans like Wells Fargo have developed trusted business weapons.
At the same time, large companies themselves have less need for outside bankers because they have developed their own sophisticated internal teams that can perform financial analysis previously performed by outside bankers.
Boutique firms are increasingly promising CEOs a specific bonus or a cut of how much they bring in during the year as a way to motivate them to run as hard as possible. Many of the larger boutiques are also publicly traded and have specific annual margins and growth targets needed to please public shareholders and keep their stock prices high.
The conundrum with the management challenge is obvious: how to maximize results while ensuring the machine underneath doesn’t break down. One boutique executive admitted that banks were taking on staff in the 2021 frenzy and many weren’t having “tough conversations”, telling latecomers they weren’t good enough to stay on as CEOs.
A recently retired banker was pessimistic that this incentive system tension between junior and senior bankers could be easily resolved. The typical investment banking executive or group leader has reached this position without ever demonstrating management skills or even the curiosity to understand human resources.
“Manufacturers with large revenues are terrible managers,” he said. “It’s a real problem. Empathy, listening skills, a lot of these people don’t have that.”
sujeet.indap@ft.com