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America's Top Graduates Don't Want Jobs On Wall Street

Tyler Durden's Photo
by Tyler Durden
Friday, Jul 30, 2021 - 06:40 PM

Even after trading Midtown and Wall Street skyscrapers for the familiarity of their parent's basement, the army of junior investment banking analysts employed at Goldman Sachs and the other major investment banks quickly found that there was no way to avoid the punishing 90+ hour weeks that are a hallmark of the investment-banking analyst programs across Wall Street. However, with the explosion of deals during the pandemic, a cadre of Goldman junior analysts decided to go public with their complaints about the hopelessly skewed work-life balance.

That sparked a conversation about whether investment banking analyst slots, once seen as a virtually guaranteed path to success in one of the world's most lucrative industries, were still worth the tremendous effort required to succeed. While the jobs typically offer six-figure compensation packages, competition from the world of tech - not to mention the buy side, where both work-life balance and compensation are more desirable - has stunted their allure.

And as bankers rebel against management's demands that they return to offices full-time, the NYT has just published a story proclaiming that "the lure of investment banking is fading" for the youngest members of the workforce.

To try and give their reporting an empirical basis, the NYT cited data from top MBA programs showing fewer graduates are finding jobs on Wall Street.

The number of applicants to banking analyst programs is hard to track, but business school data, which captures a slightly older cohort of potential financiers, shows a broad decline in interest in investment banking. Last year, the five top-ranked U.S. business schools sent, on average, 7 percent of graduates from their master’s of business administration programs into full-time investment banking roles, down from 9 percent in 2016. The decline was pronounced at the University of Pennsylvania’s Wharton School, where bankers were 12 percent of the M.B.A. cohort in 2020, compared with more than a fifth of the class a decade earlier. Harvard sent just 3 percent of its 2020 class.

After the data, the reporters included a comment from an Accenture consultant who specializes in recruiting.

"The industry is not as attractive" as it once was, said Rob Dicks, a consultant at Accenture who specializes in recruiting in financial services. "Employees want a hybrid model, and the banks are saying no," he said, referring to a combination of in-person and remote work. "The message is: 'The bank knows best, we have a model for doing this, and you will conform to that model.'"

But perhaps the most tantalizing detail included in the story was an interview with Jamie Lee, the son of legendary JPM banker Jimmy Lee. Apparently, before his death, Jimmy Lee advised his son not to accept an offer for an analyst position.

"The technology sector has just completely changed the game," said Jamie Lee, 37, who worked in banking before starting a venture-capital firm this year. "The opportunity cost is simply too high to be sticking around in a job where you’re not getting the treatment that you want."

Mr. Lee’s father, the JPMorgan banker Jimmy Lee, was for decades one of the best-known players in his field, advising companies like Facebook and General Motors before he died in 2015. But when the younger Mr. Lee was finishing college in the mid-2000s, his father urged him to avoid the analyst programs.

"He said, 'Honestly, J, the way that I’ve seen that we work these kids, I’m not sure that I want that for you,'" Mr. Lee recalled.

Even foreign students who once comprised one of the most reliable cohorts for young Wall Street recruits due to the high pay and visa help see tech companies as their No. 1 choice. If they are going into banking, most are hoping to work as an engineer, not a banking analyst.

Before graduating from Mount Holyoke College in 2016, Areeba Kamal worked for a summer as a trading intern handling complex bond products at Bank of America’s Midtown Manhattan tower. She arrived around 8:30 a.m. and often stayed until 10:30 p.m., trying to learn the intricacies of her product. She sent money to her family in Pakistan.

"If you’re an international student, early on you realize your two options are finance and tech," said Ms. Kamal, 29, noting that those fields offer the most pay and help with work visas.

But after that summer in finance, she gravitated toward tech. “I don’t want to work 14 to 15 hours a day on something I don’t care about because it pays a ridiculous amount of money,” Ms. Kamal said. She now works for Apple.

In summary, maybe Goldman CEO David Solomon shouldn't have been so dismissive of his junior employees' complaints.

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