When financial behemoths go to war it’s talented young bankers that are the prize

The recruiting process on Wall Street has grown only more frenzied, despite a recent attempt to change it

Fri, Jul 11, 2014, 01:15

Many banks, trying to stay competitive, have recently instructed their junior workers, often known for working 80-hour weeks, to take a few weekend days off a month. In the hard-charging world of Wall Street, such a policy amounts to a radical shift in culture. Some young employees, however, are unimpressed by the attempt to improve their working conditions.

‘Other opportunities’

“The investment banks are just not nearly as popular as they were,” said Peter Cappelli, a management professor at Wharton. Undergraduates “don’t feel the jobs are worth it,” he said. “They’ve got other opportunities.”

The banks don’t see it that way. In the past few years, a number have emphasised the opportunities to be had by staying put. JPMorgan Chase and Deutsche Bank recently dispensed with two-year contracts and hired analysts for three years instead. Goldman Sachs went further. Analysts who started last year were hired as full-fledged employees, with the expectation that they would “want to be here for a career,” as David M Solomon, its co-head of investment banking, put it.

Such policies have pushed recruiting further into the shadows. At Goldman, analysts whisper about the time in 2012 when the firm cracked down. That year, certain analysts, whom Goldman believed had job offers from private-equity firms or hedge funds, were pulled into conference rooms and asked, point blank, about their employment plans, according to an analyst in that class and another person briefed on the matter. “The majority of us lied,” the analyst said, insisting on anonymity so as not to damage his relationship with Goldman.

Goldman ended up dismissing several analysts who acknowledged they had accepted offers, sending ripples of anxiety through Wall Street’s junior ranks. The financial gossip blog Dealbreaker ran a post with the headline, “Goldman Sachs Does Not Look Kindly Upon First Year Analysts Who Plan In Advance.”

Some analysts, however, are looking to leave Wall Street altogether. Linda Lian, a former Morgan Stanley analyst, interviewed with private-equity firms last year. The process made her realise that she was not passionate about the business of buying companies and trying to revamp them. She recalled one interview in particular.

“I just remember speaking to one of the partners, and being interviewed by her, and realizing I didn’t want her life,” said Lian (24), who graduated from Harvard in 2012. She now works in finance and business development for a mobile phone security company in San Francisco.

“Working at a private-equity fund was going to be like Banking 2.0,” she said. “Eventually, I just realised I simply didn’t want it.” Of the recruiting process, she said, “It’s not really so much a process as a feeding frenzy, with banks, headhunters and private-equity funds all caring about their own interests. When all this starts happening, you have no choice, really, not to engage with it. If you don’t, there’s so much peer pressure around you, and you feel you’re missing out on opportunities.”

– (Copyright the New York Times service 2014)

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