But also a peculiarly American thing. If a British CEO said it, they would be mocked, much as Scott Galloway did. So I can’t imagine anyone there actually saying it. The main exception would be in academia, since in the UK you are usually recommended to choose your college course based on what you are best at/most interested in, and the highest prestige outcome as far as most of your professors are concerned is that you choose to do a PhD in their subject.
That leads to the odd situation where Americans are more focused on picking a college major that leads to a high paying career, but then have billionaires telling them at commencement to “follow your passion”.
I don’t think the number of levels of employees or number of junior employees are the primary drivers of typical hours per week. There are many smaller company software employers with widely varying number of levels, number of employees, profit/loss, … that pay software engineers well, yet still typically expect near 40 hours per week of work.
I expect it has more to do with the nature of the work, the historical business model + culture, and supply vs demand for well qualified employees. For example, a particular engineering project might have a planned schedule of finishing in 6 months. This project might have largely predictable external influences on schedule that are not driven by sudden demands from a client that the software engineer must react to the next day. There may not be a severe penalty (at the junior employee level) for finishing the project several months late, rather than the meeting original plan of finishing in 6 months. There are often very different client expectations than in IB.
If the software employer requests that software engineers work 80+ hour weeks to meet the planned schedule, then I expect the work quality would quickly become awful. More importantly, I’d expect a large portion of the key software engineer employees would soon choose to join a nearby alternative software engineering employer that has more typical working hours expectations, and get a nice sign-on bonus in the process. There is often not a big plus to sticking out the unpleasant conditions for a long period, rather than switching to a more pleasant work environment. In some environments, poaching and headhunting are common.
Most software engineering jobs are concentrated in a few key sections of the country in which there are many alternative employers that value a similar skill set, with various networking between past employees of different companies. The turnover in such areas can be quite high. One survey found that half of SV software engineers leave companies within ~2 years. It’s common for tech companies to offer a wide variety of special and unique benefits, partially in an attempt to avoid having employers leave.
Unlike many of her/his high tech counterparts, a junior IB analyst isn’t interested in her/his current job. S/he wants to become one of the few VPs in a few short years among the group of junior analysts who were hired at the same time and perhaps an MD in a decade or so. And a lateral job movement or staying in the same position isn’t an option. Since contribution to the bottom line is measured in dollars and cents at every level, no group wants to have one more junior analyst/banker than is necessary.
Many tech jobs are different these days. A company like Google has a lot more employees at many different levels doing very different things. Because of its near monopoly, many parts of it don’t need to contribute to its bottom line (in some says like the old Ma Bell), and they are no longer innovative and certainly not hungry. They contribute to the perception by some people like Sequoia’s Michael Moritz that SV tech workers had become “lazy”. However, that charaterization isn’t fair to many other tech workers who are putting in as many hours as their Wall Street counterparts to be the first to get their innovative product out of the door. Some of them may even be trying the disrupt the financial services business itself. And some of them may even work in some divisions of Google or its sister companies.
The bottom line is that there’s a greater variety of workers in tech than in financial services.
S attends and is a FIN major at a school with a heavy focus on IB (for FIN majors). Lots place in NY and Charlotte. They know what they’re getting in to. It’s very clear during info sessions and networking events. Because of that (not just the hours but what he considers to be a toxic environment) he had no interest in IB or S&T and went a different route.
These kids know the deal and have chosen to do it. Most will send their two years and move on to other high profile opportunities. Some will stay and work their way up to MD (similar to the up or out culture in consulting but not nearly as collegial while you’re there).
The Goldman kids aren’t shining a light on anything to anyone who knows the industry. It’s just the way it is (poor excuse - very inefficient use of time but it works for them). No one forced them to take the job and there are over 100 applicants for each seat.
Frankly I’m glad S didn’t want to pursue as there are other ways to make a great living and learn a lot while actually enjoying life but that’s neither here nor there. These kids chose their path. I guarantee you they knew what they were getting into.
If they are sophisticated enough to get the job, they likely knew the culture. The pandemic and work from home has really shifted things adversely for the junior IB set, stuck in small apartments and lacking the socialization/shared misery that helps offset the long hours.
I would add to that the driving products/economics are very different between tech and IB. IB (equity/debt offerings, M&A vs sales and trading, fund management and wealth management) products mostly are transactions with very finite time frames and windows driven by the clients. The largest cost for IB’s are its professional employees. To maximize profits (and bonuses), the economic model is to leverage the employees to secure and close as many transactions as possible during the fiscal year. In addition to actual execution, a great deal (maybe a majority) of a junior banker’s time is spent on supporting pitches to keep the pipeline full. If deal flow is low, there is even more pressure to churn out pitches in the short run. If deal flow remains low, cuts are made to realign compensation cost to revenue. While I would not say that IB work is shoddy, most deals are put together as sledge hammers to meet the transactional requirements and you rely on good lawyers, external and internal, and internal risk management to mitigate any post-transaction blowback. Your payday is the transaction (of course you want to do right by the client to continue future flow, but that’s another deal). This means that especially for junior bankers, they don’t need to be at peak mental efficiency for much of what they are tasked to do. There may be significant diminishing returns on productivity, but even what they do past 10pm/midnight is probably incremental.
My impression of tech, first there are not the same client time/demand pressures. For the most part, companies are trying create new products or improve existing ones which will generate revenue and profits over the entire product lifecycle, so it needs to built right in the first place and hopefully scalable and evolvable. The time frame for development is driven internally and because the product’s long term quality is critical, it is important for the people working on it be at peak mental ability.
Also, there is built in expectation of significant turnover at IB’s. So churning through employees, especially juniors, is part of the business model. Not familiar enough with tech, but I am guessing that keeping employees with valuable proprietary IP knowledge is pretty important, so high turnover would be a problem.
Although I’m not and have never been involved in IB, I know many who are/have and respectfully disagree. The typical path for a kid is through a top school, it’s finance related ECs (regardless of major), OCR, networking, etc. At every stage within that cohort, work/life balance comes up. Spend a moment on Wall St Oasis (WSO - the IB / finance version of CC) and you can’t go more than a few threads without reading about it.
I imagine the few kids that get caught off guard are the ones that got in from more mainstream schools where OCR and alumni networking is highly diminished or non existent. Those kids are in the minority specifically for IB. Really hard to get there from that world. Really hard to get there from anywhere actually.
I recall speaking with S his freshmen yr after he attended an IB info session and was so turned off by the whole thing. Sat through the session, mingled, followed up with an alumni associate on the M&A team and knew “not for me”. The guy shared what he needed to do in order to be competitive for an internship and he wasn’t even interested in that. Any kid who did any networking would certainly hear about war stories. The more they network, the more real that becomes.
CFO friend of mine who has a son who interned at GS last summer and will return full time this summer had those ridiculous hours. He “loved it”. Don’t know why. Can’t imagine that but his dad, who deals with bankers all day long, told him that’s the deal.
Agree that it would be very hard for a kid to get an offer at a top tier investment bank without knowing what he/she is getting in to. But my observation (35+ years in corporate recruiting) is that there is a layer of cognitive dissonance for the kids who are “gunning” for a “prestigious” offer (in any sector). Probably similar to what fourth year med students feel when their mentors, professors, and even the nurses during their rotations tell them about the most competitive residencies.
The kids with the stats, who have already invested so much to get where they are, feel TOO invested to take a step back and ask “is this what I want?” Regardless that it’s fallacious reasoning- sunk costs and all that.
But to get a job at Goldman and to be surprised by the lifestyle? Hmmm…
I think most applicants, especially the successful ones, have had plenty of opportunity to find out about the grind and hours from talking with friends or going through networking events or through interviews. However, whether or not that truly registered is another question. Their experience to date might be a few all nighters for papers/projects or a week of cramming for finals. They have not experienced the longer term physical and mental toll of consistent 70/80+ hours a week.
This. It’s the same with biglaw. Hearing someone else tell you about long hours and having to endure them yourself is not the same thing. Students think they can handle it until they have to. You just don’t really get it until you’re living it.
Even if they knew, so what? Most of them aren’t going to work in high tech and none of them is likely going to be an engineer. Their best options by that point are between IB and consulting.
Very different physical and mental toll in those two. Constant travel can actually be quite enjoyable for a few years when you are young. “Up in the Air” portrayed a much more desirable lifestyle than “Working Girl” even if neither is true to life.
Everyone could have learned what work was like in previous years and prepared for that. People could have a long day of work and leave late in the evening, perhaps midnight, but know that they were free until 9am the next day.
With covid and everyone working remotely, that boundary no longer exists. New work can be assigned at midnight with the expectation that it is complete by the morning, and that is causing the burnout.
Since this is in the parents fourm, one thing that people of advanced age forget is that 22 year olds think that they are invincible. This is the same mindset that the military uses to get people into the Special Forces. Every person at the end of basic training thinks the can handle it.
And let’s face it- some of these 22 year olds ARE invincible. I’ve seen stamina and focus from young employees whose work ethic and drive is off the charts. And many of them are kind and empathetic and don’t lose themselves despite working punishing hours. And not just 22 year olds-- I’ve seen young residents in hospitals on insane, mind-blowing schedules who make the time to sit with patients families to explain why a loved one is going to die and what’s going to happen, or to sit with a patient to reassure that there are going to be three or four bad days and then they’ll feel better.
Some people are just better at going without sleep for extended periods of time, and some people are able to work long and intense schedules without losing it.
Agreed. My D has also been in for 4 years. When she’s on a deal, it’s definitely round-the-clock work. Pre-Covid, she’d only come for dinner and then go back but now that everyone is remote, and will continue to be, indefinitely, at least she doesn’t have to leave her house in the middle of the night to go into the office. She’s never had to miss a vacation. Her group is good about absorbing work when someone is going to be out of the office. She has great camaraderie with her co-workers and they frequently get together outside of work.
The bank she works for seems to be on top of making sure there is a good work/life balance. They survey employees regularly and make adjustments.
She did not have her sights on being in this field but scored a spot in the bank’s competitive IB summer internship before her senior year of college, which led to a full time offer. She doesn’t intend to be in this field forever, but the money is very, very good for someone her age. She is wisely squirreling it away, so when she does leave, she’ll have a nice nest egg and be able to work for a non-profit (she currently serves on the board of one) and start a business with her soon-to-be husband.