Re:Why Goldman Sachs wants junior bankers to take weekends off
by mathattack on Wednesday October 30, 2013 @12:40PM
(#6641392)
For the most part, the jobs in tech are just better jobs. The senior people you work for are less likely to treat you as if you are "useless" and only worth what you're paid because you are "available at all hours."
The work is more psychologically rewarding and has less social stigma attached to it. You don't have to wear a tie. And there is the perception among young people that the potential financial upside is larger in tech than in banking (this is not entirely accurate but that's beside the point).
Goldman's move to free up the weekends of investment banking analysts is no doubt driven by an understanding that the market has changed. Finance no longer has a monopoly on smart kids looking to make a lot of money. It has to compete to win them away from tech.
This is exactly it. Investment banking barely pays more than tech for analysts. Banking IT pays engineers less than Google or Twitter. Add in the social prestige, quality of life, and respect from management, and it's understandable why they are having a harder time hiring the best.
Goldman has a choice: Pay a lot more, Accept less worthy talent, or treat them better. They chose #3.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by mathattack on Wednesday October 30, 2013 @03:55PM
(#6642896)
I'm not sure I agree, but if I'm wrong, it even further explains why GS is doing what they do.
My impression is that the analysts can make 100K in year 1, and 200+K by year 3 or 4, but no equity. I would think that folks at Google making 200K after 3 or 4 years are outliers. Please correct me if I'm wrong, as I'm a little out of touch for what large tech firms pay.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by zallarak on Wednesday October 30, 2013 @05:52PM
(#6643674)
Nah, analysts will make 100Kish for up to 3 years, where they can then be promoted to associate which is 150-200K, maybe more if they are great or the firm has a great year. Some firms offer up to 150K for entry-levels but half that comp is an end-of-year bonus which sucks because its at the end of the year (lock-in) and it gets taxed at a higher rate.
Engineers at the big tech firms pull in 100K+ (this plus literally means up to 200K.. more for some real talent) with solid signing bonuses as a starting salary. No end-of-year lock-in bs either.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by gaius on Wednesday October 30, 2013 @06:08PM
(#6643787)
Google isn't making anyone rich anymore - they have >20,000 engineers. They aren't a startup, they're on a similar scale to HP or Accenture. Decent salaries but no equity worth a damn and senior management have no idea who you are.
And secondly, 19,999 of those engineers are working on displaying ads and billing companies for displaying those ads. I'd wager that isn't actually very exciting work.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by jsun on Wednesday October 30, 2013 @11:45AM
(#6641093)
Problem potentially even more dire than article makes it
"These jobs pay very well. According to the job search site Indeed.com, the average salary for an entry level software engineer in New York City is $71,000—just about the average for an entry level investment banker."
is a very misleading statistic. At a good school maybe the top 5% of a graduating finance class gets banking jobs. Pretty much every single CE or CS major gets a job in technology if they want one. The top 5% goes to work for a top tech firm who routinely pay 1st years 100-120k+, with amazing perks, work life balance, and tremendous growth potential.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by Lavery on Wednesday October 30, 2013 @12:39PM
(#6641386)
The other miss with that same quote is the implication that average salary is the same as average comp. In addition to the base salary, junior bankers typically expect to take home large bonuses--in a good year, sometimes 100% or more of their base salary.
While I'm not as familiar with the tech sector, my understanding is that they don't have similarly structured bonuses.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by rayiner on Wednesday October 30, 2013 @12:46PM
(#6641439)
Not for junior analysts, and not in this economy. Average base + bonus seems to be just over $100k for junior IB analysts at GS/MS/JPM this year, pushing to just over $200k after a few years. After that, the banker starts to pull away rapidly, and can earn the 100%+ bonuses. But on the flip side, you can probably still expect to have a job at Google in a few years, but the standard for investment banks is a 2 year contract after which only the best analysts are retained.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by rayiner on Wednesday October 30, 2013 @01:25PM
(#6641737)
How is "120-130K all in for top bucket in 2013" different from what I said (average just over $100k)? I'm thinking average at GS/MS/JPM for first years was ~$110k, no? As for Goldman, I'm aware they're getting rid of the contract, but it's still standard practice in the industry as a whole. Also, just because the contract is going away doesn't mean "up or out" is going away. At the end of the day you have to weight those high salaries for more senior bankers against the fact that the recruiting model of investment banks involves only a fraction of new hires making it even past a few years.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by rayiner on Wednesday October 30, 2013 @02:00PM
(#6641969)
No, parent comment said: "Bonus is probably 100-250% of base, and a lot of times the 100% part is guaranteed."
The plain meaning of that is that $130k all-in (100% bonus) is typical, and often guaranteed, with the top bucket being over $225k (250% bonus).
With first-year salaries at Google, etc, pushing $120k+, that's a very relevant difference. It's not accurate to imply that a first-year analyst at a bank could make up to $100k more than that.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by ajiang on Wednesday October 30, 2013 @02:58PM
(#6642446)
You're right, I misread the top end of that range. Top trading firms get close to that, (e.g. Jane Street), but $225k is probably pushing unlikely until your 3rd year.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by jsun on Thursday October 31, 2013 @01:31PM
(#6648225)
It's long been observed that once earning reaches a certain absolute number, quality of life and other intangibles quickly overtake monetary compensation as the primary driving force. Basically its saying if my options were 60k/year and great quality of life vs. 120k/year and shitty quality of life, I'm much more likely to take the 120k than if the situation was 120k/year vs. 240k/year.
The problem is very real, banks wouldn't be responding to it otherwise.
Also helps that tech companies are "winning" the PR war against traditional banks. Being a banker used to be fucking cool, now its lame.
Edit: okay, that last line was confusing, so let me try to explain what I mean: Most bankers aren't married to finance, it's not like they have this amazing passion for excel financial models. They are attracted to being at the very top of the talent ladder, in a position that offers the most challenge and potential reward. Nowdays technology is seen as an equivalent option for a lot of kids entering school
Re:Why Goldman Sachs wants junior bankers to take weekends off
by nilkn on Wednesday October 30, 2013 @12:54PM
(#6641492)
I realize Glassdoor is hardly the last word on this, but its figures don't seem to agree with this at all. In fact, for an analyst at Goldman Sachs, Glassdoor reports the average total compensation as $76k.
I'm not saying you're wrong. I'm just saying that these self-reported numbers don't agree with you at all. I'm curious what your explanation would be for the huge discrepancy.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by refurb on Wednesday October 30, 2013 @12:33PM
(#6641355)
The difference is the long-term compensation potential. There are many jobs you can take as a fresh undergrad that will pay you what a investment banking job will. However, there are very few jobs that will pay you $1M+ after 10 years of experience.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by rayiner on Wednesday October 30, 2013 @12:52PM
(#6641477)
The key word there is "potential." You have to account for the fact that due to the "up or out" system, most people will never be there long enough to earn $1m+. Now that Google and similar companies are breaking through the "low $100k" salary ceiling that used to be common in tech, you really have to compensate for the probability of lasting long enough in a bank (or being able to exit to PE/VC/HF) in order to earn those really high salaries.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by refurb on Wednesday October 30, 2013 @02:48PM
(#6642355)
I don't disagree. However, investment banking is a relatively low risk way to a multi-million dollar salary. You stand a far greater chance of surviving the up-or-out than striking it rich through a start-up.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by squeed on Wednesday October 30, 2013 @12:48PM
(#6641456)
I graduated with a degree in CS from Columbia in 2007, at the peak of the finance boom. Most of my classmates at least considered a job at an i-bank; a lot of us had internships. I had a sweet job offer from Morgan Stanley waiting for me that I turned down to leave NYC for good (good riddance!). It was such a crazy time then, but it was all we knew. There was a constant stream of crazy, lavish recruiting events on campus from all the banks; it seemed like everyone was going to go work for them and that was normal.
Three years later, and the only people in my cohort who still work at the banks are those who seemed to be in the lower tier of students. Everyone else had either moved to GOOG, a start up, or San Francisco. I'd love to see what the on-campus culture is now.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by rgbrgb on Wednesday October 30, 2013 @12:56PM
(#6641506)
I just graduated from Columbia CS last year and what you describe your friends doing now seems to be the norm for seniors looking for jobs. Google definitely had higher profile recruiting events than any of the banks. There are still a few looking at jobs in the finance sector but not nearly what I had heard about coming into Columbia.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by m_ke on Wednesday October 30, 2013 @12:57PM
(#6641512)
As someone who's about to gradute from CU in the spring, I can confirm that banks still have a strong presence here. Like you said, most of the top CS students avoid them but their events still draw a large crowd of international students.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by walshemj on Wednesday October 30, 2013 @12:32PM
(#6641349)
Yes but when you actually look at this in detail by reading the comments of real IB types - a lot of those hours are just presentism they dont really do much more in an 8:30 till 11 Pm day than you would in a normal 8 hour day.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by rmcfeeley on Wednesday October 30, 2013 @02:04PM
(#6641998)
Once, I made the mistake of asking a more senior IB analyst the following question at a party (I did not know him well):
"Some junior investment banking analysts work over 100 hours a week. There is no way that anyone is firing at full steam mentally pulling those hours weekly, because science. Why don’t banks just hire twice as many analysts and pay them all half as much to get more intellectual bang for their buck?"
He was not pleased.
Thoughts on what this means for our changing economy (and brunch):
Re:Why Goldman Sachs wants junior bankers to take weekends off
by jsun on Wednesday October 30, 2013 @02:47PM
(#6642343)
Banking is a relationship business. The hours aren't so much for productivity as for bonding. Think of it as a frat initiation ritual that lasts years. Some very small portion of IB analysts remain in IB, most move off and become successful somewhere else, building an incredibly strong network of captains of industry over time, all tied back to that particular investment bank.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by lmg643 on Wednesday October 30, 2013 @02:35PM
(#6642244)
it's a great question. i think the only "real" explanation is that junior bankers become senior bankers, there are very low barriers to entry once you're inside (learn excel and accounting), and so working 100 hours a week is a way to limit the competition and prove your worthiness - you wanted it more than anyone else.
mindless, yes. but it makes sense - banking is basically an exceptionally lucrative gentleman's occupation. particularly considering the largest clients have the resources to do M&A in house, so the bank most often gets paid fees for justifying what the client was already going to do.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by nilkn on Wednesday October 30, 2013 @12:31PM
(#6641345)
Investment banking jobs are also, generally, available only in NYC, specifically Manhattan, where the cost of living is matched only by San Francisco (in the US). There are still many high-paying jobs in software development in a variety of cities outside of the major tech hubs.
Re:Why Goldman Sachs wants junior bankers to take weekends off
by itcons on Wednesday October 30, 2013 @01:36PM
(#6641800)
Are you kidding me? I've worked in tech consulting since leaving university, spent a lot of time at Accenture and have worked just as many hours per week as my friends in the big 4 banks.
The work is more psychologically rewarding and has less social stigma attached to it. You don't have to wear a tie. And there is the perception among young people that the potential financial upside is larger in tech than in banking (this is not entirely accurate but that's beside the point). Goldman's move to free up the weekends of investment banking analysts is no doubt driven by an understanding that the market has changed. Finance no longer has a monopoly on smart kids looking to make a lot of money. It has to compete to win them away from tech.
This is exactly it. Investment banking barely pays more than tech for analysts. Banking IT pays engineers less than Google or Twitter. Add in the social prestige, quality of life, and respect from management, and it's understandable why they are having a harder time hiring the best.
Goldman has a choice: Pay a lot more, Accept less worthy talent, or treat them better. They chose #3.
My impression is that the analysts can make 100K in year 1, and 200+K by year 3 or 4, but no equity. I would think that folks at Google making 200K after 3 or 4 years are outliers. Please correct me if I'm wrong, as I'm a little out of touch for what large tech firms pay.
Engineers at the big tech firms pull in 100K+ (this plus literally means up to 200K.. more for some real talent) with solid signing bonuses as a starting salary. No end-of-year lock-in bs either.
http://www.cnbc.com/id/101156782
And secondly, 19,999 of those engineers are working on displaying ads and billing companies for displaying those ads. I'd wager that isn't actually very exciting work.
"These jobs pay very well. According to the job search site Indeed.com, the average salary for an entry level software engineer in New York City is $71,000—just about the average for an entry level investment banker."
is a very misleading statistic. At a good school maybe the top 5% of a graduating finance class gets banking jobs. Pretty much every single CE or CS major gets a job in technology if they want one. The top 5% goes to work for a top tech firm who routinely pay 1st years 100-120k+, with amazing perks, work life balance, and tremendous growth potential.
While I'm not as familiar with the tech sector, my understanding is that they don't have similarly structured bonuses.
Also not true is the 2 year contract, as GS is moving towards a career model and away from a 2 year analyst model.
http://www.mergersandinquisitions.com/2013-investment-bankin...
http://www.businessweek.com/news/2012-09-13/goldman-sachs-st...
The plain meaning of that is that $130k all-in (100% bonus) is typical, and often guaranteed, with the top bucket being over $225k (250% bonus).
With first-year salaries at Google, etc, pushing $120k+, that's a very relevant difference. It's not accurate to imply that a first-year analyst at a bank could make up to $100k more than that.
The problem is very real, banks wouldn't be responding to it otherwise.
Also helps that tech companies are "winning" the PR war against traditional banks. Being a banker used to be fucking cool, now its lame.
Edit: okay, that last line was confusing, so let me try to explain what I mean: Most bankers aren't married to finance, it's not like they have this amazing passion for excel financial models. They are attracted to being at the very top of the talent ladder, in a position that offers the most challenge and potential reward. Nowdays technology is seen as an equivalent option for a lot of kids entering school
http://www.glassdoor.com/Salary/Goldman-Sachs-Analyst-Salari...
I'm not saying you're wrong. I'm just saying that these self-reported numbers don't agree with you at all. I'm curious what your explanation would be for the huge discrepancy.
http://www.glassdoor.com/Salary/Goldman-Sachs-Investment-Ban...
Three years later, and the only people in my cohort who still work at the banks are those who seemed to be in the lower tier of students. Everyone else had either moved to GOOG, a start up, or San Francisco. I'd love to see what the on-campus culture is now.
"Some junior investment banking analysts work over 100 hours a week. There is no way that anyone is firing at full steam mentally pulling those hours weekly, because science. Why don’t banks just hire twice as many analysts and pay them all half as much to get more intellectual bang for their buck?"
He was not pleased.
Thoughts on what this means for our changing economy (and brunch):
http://robmcfeeley.com/post/65530961398/goldman-sachs-encour...
mindless, yes. but it makes sense - banking is basically an exceptionally lucrative gentleman's occupation. particularly considering the largest clients have the resources to do M&A in house, so the bank most often gets paid fees for justifying what the client was already going to do.
Word that Goldman Sachs is discouraging its junior investment bankers to take weekends off initially prompted scoffing.
That sentence is awkward, and I understood it to be the opposite of the meaning implied by the following sentence.