Not so fast.
I never understood the obsession with IB. The work is dull and the hours brutal. Yet many go into six figure debt to attend an IB target school solely for the purpose of increasing their odds of landing an IB internship/full time position. While the pay is excellent, it’s not worth it, imo, and is why most don’t last in the industry beyond 2 years.
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My sister in law just resigned from Goldman Sachs after working there for only six months. She’s in her early forties and has worked in banking and for a hedge fund for years. The work load at GS was insane and she never saw her young children. She was getting up at 4 AM on Saturdays to work. Yes, she gave up a lucrative salary and bonus, but she’s happier spending time with her children.
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Before her current job, my D landed an extremely well-paid job elsewhere, not in banking or consulting. The salary and minimum guaranteed bonus were six figures and her new coworkers were from HYP and similar.
She met up with a few of the coworkers, one of whom said to her that he took this particular job because it was a regular 40 hour work week. He said “why would I work 80 hours a week when I can do this job for the same amount of money?” The catch is that this job was for a manufacturing company and not “glamorous”, like IB is, apparently.
D ended up finding a much lower paid job elsewhere, which is relevant to her career goals. She was actually seriously stressed out by the idea of “golden handcuffs,” which would have been part of the other job. D knows a few kids who have gone into IB or consulting. She doesn’t envy them at all. They literally work all day, every day. Maybe the payoff is worth it to some people.
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This is a little snowflaky for me lol.
Know a few friends’ kids who have worked in IB. Some thrived, some stayed only a short time. It is a very intense workplace in most instances if you work on Wall Street. However, kids need to realize that most firms don’t pay 6 figure salaries for a 9-5 job. And these employees are free to leave at any time and there are hundreds of people who would gladly take their place. 92% were ignored in meetings? Sorry you’re a junior analyst…lowest man on the ladder…you’re lucky to be in the meeting. Micromanagement? Again, you’re on the learning curve…you need to prove yourself and you’re not in the office so the partners can see what you’re doing and check in as needed. I agree that working 9am-midnight day in and day shouldn’t be the norm but sometimes that’s what it takes and you don’t always get your Friday night or Saturday. But again agree you shouldn’t be working all day every weekend.
First year lawyers (who make around $200,000) often work just as hard. First year medical residents (who make a fraction of that 6 figure salary) work just as hard (although they did complain and now they don’t work as many hours as they used to) and aren’t given free dinners and paid rides home.
Many people who start in IB are drawn by the big payout if you can make it to the upper levels. However, there are IB firms located outside Wall Street with better culture/environment.
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Junior analysts/bankers are Wall Street’s version of “cheap labor”. They’re at the bottom of a totem pole in a world where “you eat what you kill”. They are smart young people but they don’t generate any revenues. They’re easily replaceable by next year’s lineup of graduates (including, yes, many from HYP) as many of them only get to use their Excel and PowerPoint skills.
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The vast majority of people joining IB firms do not intend to make a career there. Like consulting, which also has ridiculous hours, the real value is in terms of the high-paying options of where to work afterwards. Most employees leave after two years.
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I think technology has made the analyst role much harder/more intense at IBs.
My oldest shakes his head I tell stories about being an associate 30+ years ago and all the mundane things we spent time on because of the lack of technology. The hours were the same but having "down time’ waiting for the graphics department or the word processing department to turn things because Word & PowerPoint didn’t exist. Pre-Blackberry/Email it was also easier to disconnect.
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Consulting isn’t nearly as bad as IB. And the work is much more interesting.
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Can you expand on this? Do you mean IB firms that have different offices, for example, say Jefferies’ office in San Francisco, or IB firms that have no NYC presence? I would be interested in knowing some names of the latter!
The issue with consulting is travel. For many people, that takes a real toll on the body that is different from the toll from long work hours.
And in terms of interesting work, for IB that really depends upon the sector and team. Quite often the tech people seem to be happier than say the M&A people.
ETA: In terms of workload at IB, the pandemic time seemed to be particularly bad. Pre-pandemic, there was at least the boundary of time in the office vs time at home. With everyone working remotely, that seems to have disappeared.
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Even pre-pandemic, many consulting firms had significantly cut back on travel. For many (but not all) consulting teams there is no need to be on-site at a client anymore.
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S worked at a consulting boutique 1 summer and a direct competitor of GS the next. The rep of GS vs even some of the other major WS banks is that it is more intense and cutthroat. S stopped his process with GS when he got an offer from the competitor because of this. He worked equally insane hours at the IB vs the consulting gig, but enjoyed the IB work more. Part of this might have been because he was working on the trading side where there is visible real world results.
Agree with the comments above that most junior bankers are doing this to get the experience. Many though probably don’t have realistic expectations of the grind that it is, though no different than Big Law or consulting.
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Depends on the firm. And it will be interesting to see how things change at even those that still require significant travel once things return to normal.
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Sorry I should have been more precise. I was referring to boutique or middle market investment banks, not the huge full service ones like GS.
And to work at those you may need to put in a couple years at a larger IB to get the foundational experience.
Will also add DH is at a boutique IB firm and he ended up in IB without a stint in NYC. But today’s IB world maybe different where career paths are concerned.
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Here’s something that might not be obvious to outsiders about why IB is considered so attractive, and why there is a typical 2-year cycle before leaving.
First of all, new IB employees sign up for 2 years as part of their contract. While employees can quit or be fired before then, they likely won’t be getting a job at another IB firm.
Here’s the interesting part. The finance industry headhunters know that most IB employees are leaving in two years, and they start calling new IB employees right away, quite often their first day of work, exposing them to the opportunities that are available afterwards. It is pretty common for a new IB employee to finish this recruiting process within 9 months of joining, knowing where they will be working at the end of two years and how much they will get paid.
Is consulting similar?
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The tech groups in Silicon Valley are much more laid back. Rather than East Coast suit and tie, it is khakis or jeans. The hours seem to be lower, and the work more interesting.
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At the top firms it’s similar. But here is the major difference, imo - the more typical IB exits are usually to PE, hedge funds, or to F500s. The former two are often just a continuation of the IB lifestyle. The F500 positions don’t require IB backgrounds, so why kill yourself for 2 years. IB is very overrated if you value more than money. I’ve seen enough, read enough, and talked to enough people in the industry that you won’t change my mind, and that’s coming from someone with biglaw experience. That said, I did have my DD check IB out for herself and she came to the same conclusion (for additional reasons on top of the lifestyle). She’ll be going the consulting route instead.
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I actively discourage people from joining IB firms without knowing what it involves. I liken it to a medical residency in terms of workload. But I think you are incorrectly generalizing here:
the more typical IB exits are usually to PE, hedge funds, or to F500s. The former two are often just a continuation of the IB lifestyle.
If you are talking megafund PE and certain hedge funds, then yes, you are talking about the same lifestyle. But there are many other options beyond megafund PE and these hedge funds, many of which have closer to 60 hour work weeks.
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I like to see the actual survey rather than news article making comments about the survey. Someone uploaded the survey to https://drive.go ogle.com/file/d/1jyeu-wvS3Z10xQ0BlMIDOkh_INoP_Nnb/view . (remove space between the 2 o’s in go ogle)
It’s a sample of 13, so there may be some non-representative results. However, first years reporting long hours at GS and other IBs is nothing new. Some specific numbers from the survey are below:
- Average hours of work per week = 98
- Average hours of sleep per night = 5
- 77% reported being victim of workplace abuse
- 75% reported seeking/considering therapy due to job stress
- Change in physical health on 1-10 scale: Before = 9.0 / After = 2.3
- Change in mental health on 1-10 scale: Before = 8.7 / After = 2.8
- Job satisfaction on 1-10 scale: 2
- Personal life satisfaction on 1-10 scale: 1
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