Maybe you don’t have to work seven days a week to succeed at Goldman Sachs Group Inc.
The New York banking company said it has spent the past year working to improve the work-life balance of most-junior employees, known on Wall Street as analysts, by reducing their hours and other measures.
The moves come as banks across the industry struggle to keep young workers who increasingly are favoring the better hours at hedge funds and private-equity firms and the lavish perks at technology startups over Wall Street’s grinding analyst programs.
“Banks over the last couple of years, especially the [biggest], are frustrated that they cannot retain people,” said Matan Feldman, founder and managing partner of Wall Street Prep Inc., a training program for investment bankers.
Goldman long has been viewed as a fast track to wealth and a wellspring of talent. Some of its top executives began their careers in its much-copied analyst program, which started in 1982. Since then, the programs have become synonymous with grueling work loads, late nights and depressingly frequent orders for takeout food.
But earlier this year, Goldman formed a task force made up of senior staff from different businesses within the firm to improve quality of life and promote career-development opportunities for junior employees. It has implemented the task force’s suggestions.
This isn’t the first time banks have faced a war for talent. In the dot-com boom in the early 2000s, college graduates increasingly turned to technology jobs over investment banking. Banks pumped up their salaries and made lifestyle concessions, such as free dinners and car service home, for analysts staying late.
But this time banks, which are under public and regulatory pressure to keep pay down, can’t merely boost compensation to lure young people.
One of Goldman’s goals is to find ways to help young employees finish their work during the regular five-day workweek and avoid all-nighters. Weekend work should be reserved for “critical client activity,” the task force found.
For example, when a more-senior analyst commissions a client presentation, the task force has advised asking for a short outline rather than a full presentation that could run 100 pages or more.
Goldman also created new technology that makes it easier for senior bankers to let analysts know what kind of information they need. In an attempt to minimize email traffic, the technology lets senior bankers input specific requests through a portal that can be accessed by the analyst anywhere. This allows senior bankers to be more explicit in their requests, ensuring the junior analysts have a shot at getting the information right the first time, a Goldman spokesman said.
The task force came on the heels of Goldman’s decision last year to do away with the two-year contracts for most analysts hired out of college. Instead, the firm said it would hire recent college graduates as full-time employees.
Goldman hired 332 analysts to begin work in 2014, up 14% from 2013, the spokesman said. He added that the firm is betting that hiring more analysts will spread the work among a wider group of people.
“The goal is for our analysts to want to be here for a career,” said David Solomon, co-head of Goldman’s investment-banking division. “We want them to be challenged, but also to operate at a pace where they’re going to stay here and learn important skills that are going to stick.”
Goldman Chairman and Chief Executive Lloyd Blankfein told a group of departing summer interns during a question-and-answer session this month that they would do well to “lighten up,” according to a video on its website. “People at the age of the people in this room could also relax a little bit, too,” he said.
Scott Rostan, founder and CEO of industry-training firm Training The Street Inc., said that unlike in the 1990s, when Wall Street analysts rarely quit their posts, junior staffers today are far less likely to finish their full two-year terms. He said some banks are seeing between 60% and 80% of analysts bolt before their two years are up.
“Lifestyle is very important, especially for millennials now,” said Mr. Rostan. “Behind the scenes, [banks] are all somewhat on different levels how we retain our talent. They’re not sure how to do it because the common lever in the past was pay, but they can’t do that.”
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