<p>Why don't investment banks just hire more people? Can't they spend a little more money to get thing done faster? The analysts wouldn't have to spend so much time at the office if they had more people, right?</p>
<p>don't whine just because Ibanking doesn't hire idiots.</p>
<p>Their ridiculous hours come from the nature of the work, not the amount of work. If a client calls at 5PM and asks for something to be done by 9AM the next morning, then you don't say no, you do it. And thus you end up staying at the office until 3AM doing the work because 2 other clients called and each one wants something by 9AM.</p>
<p>That would defeat the purpose. IBankers like to work hard and they like to earn HUGE bonuses. Hire more people would change the nature of the job to the point where the profession would lose its charm.</p>
<p>Hiring more people doesn't necessarily mean things get done faster or better. You get diminishing returns on labor (law of diminishing marginal returns.) In theory, you hire so many people that they start bumping into each other.</p>
<p>More is not always better, particularly in business.</p>
<p>
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That would defeat the purpose. IBankers like to work hard and they like to earn HUGE bonuses. Hire more people would change the nature of the job to the point where the profession would lose its charm.
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Agreed. This is the #1 reason. There is absolutely no reason that an analyst just out of school is a 100K+ position.</p>
<p>^ As any high school economics student would tell you. Duh. ;)</p>
<p>I would describe it differently. People who get into Ibanking tend to be VERY motivated to suceed monetarily and professionally ... and to a degree you are competing with your colleagues at your level. So if you are an entry level analyst and want a promotion to senior analyst you need to provide the most value compared to the other entry level analyst ... and given a pool of incredibly bright and ambitious colleagues ... this means you need to work your butt off to stand out. The jobs are fundamentaly very challenging; and throw in the workers ambition and you get a ton of work hours.</p>
<p>Wait...did you just say that an analyst position is fundamentally very challenging? Are you kidding?</p>
<p>According to people in the industry, the highest "downer" would be the long hours. I understand the ambition part is what makes people want to do the job and "not share the hours." But why don't ibanks just hire more people? Wouldn't the ibanks get more things done that way? Just lower the pay slightly and hire one more person to help out on the pitchbooks or whatever. Wouldn't "Bob's 50th hour" be more efficient than "Joe's 90th hour?" Plus, if ibanks hired more people, that'd make the job even more competitive</p>
<p>"But why don't ibanks just hire more people? Wouldn't the ibanks get more things done that way?" </p>
<p>Well, IBanks normally cut up people's contracts each year. Banks like Goldman Sachs cut the lower 5% each year regardless of performance. There's a curve system at each BB and everyone has to maintain the level of expectancy, otherwise, they are fired during year end reviews. The managing directors know what they're doing. If you calculate the average compensation and the average hours worked.</p>
<p>Average 1st year analyst salary+bonus (100,000)
Average weekly hours 70.</p>
<p>100000/(70*48)=$29.76 per hour.</p>
<p>Average good 1st year accountant salary (54,564)
Average weekly hours 40(50-60 for big4 candidates)</p>
<p>54,564/(40*48)=$28.42</p>
<p>Just as UCLAri(go bruins) said, the theory of diminishing marginal returns. IBanks are getting the absolute best of the best for only $1.34 more per hour. Why begin to recruit people further down the chain when you can have the best work twice as hard? It helps to weed out the flakes and shriking.</p>
<p>Plus, "The Pusuit of Happyness" wouldn't have been good if he only had to work 40 hours....</p>
<p>considering the average accountant will not receive 54k out of college, that is not a vary fair example. Nor is the fact that the average at bulge brackets again hovered near 150k this year. Consider a student that was hired last year and is half way through his two year stint (some are three years now but we shall ignore this), by the time he is finished, he would have accumulated 300k while an accountant in NYC (for this i think we can assume 55k) would have only 110k with a slight likely hood of a small bonus.</p>
<p>
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the theory of diminishing marginal returns
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</p>
<p><em>AHEM</em> The law of diminishing marginal returns... ;)</p>
<p>See the last 2 quotes? That shows you the intellgence of business students.</p>
<p>I didn't realize that my correcting him in a tongue-in-cheek manner demonstrated my intelligence...or lack thereof.</p>
<p>Fascinating.</p>
<p>I was talking about the persons being quote.</p>
<p>the kids that talked about ibanking = stock broker and can't distinguish between theory and law.</p>
<p>I wouldn't exactly call someone stupid for thinking that the law of diminishing marginal returns is a theory. It's not like it makes it any less important.</p>
<p>I didn't call anyone stupid, did I, nor did I say you called someone stupid.</p>
<p>I said: "the intellgence of business students." </p>
<p>It's not my fault if it reminds you of the word "stupid".</p>
<p>C'mon, enough with the silly semantics. You were calling into question the intelligence of a group of people based on some quotes.</p>