Goldman Sachs fancies work-life balance. Goldman Sachs is asking its junior employees to work regular hours and avoid overtime, reports Sarah Butcher on eFinancialCareers. They will in turn recruit more analysts to ensure that work loads are sustainable.
Yet Sarah Butcher questions whether or not this is a clever idea. First off, she refers to Universum’s data that shows that students entering the sector are not concerned about work-life balance. Far from it, they’re willing to work hard to cash-in.
Until now, Goldman Sachs has paid higher wages in comparison to other banks. According to Butcher, Goldman Sachs pays a first year M&A analyst $122K. Compare that to Deutsche Bank or Barclays that pays $112K. As Butcher rightly points out, it’ll cost Goldman Sachs $4.9M in salary costs, if it wants to recruit 40 extra analysts to take the load off its current employees.
Studies show that the long working hours combined with lack of sleep results in lower productivity levels. If employees are working excessively, they’ll be stressed and at some point burn out and leave the company. On that note, the work-life balance initiative might just pay off — bankers might perform better, stay with the company longer and it might just create a new and positive reputation for Goldman Sachs, enabling it to attract and recruit young graduates more easily.
Indeed, the approach raises a great deal of questions. Firstly, is Goldman Sachs willing to incur these hefty costs? Secondly, will it result in the bank bringing down the average salary? Thirdly, will young investment bankers accept the pay-cut? Lastly, will the bank’s new association to work-life balance give it a competitive edge in recruiting bankers? Time will tell.
Butcher, Sarah (2013). Goldman Sachs is likely to pay its analysts less now. Is this a HUGE MISTAKE? eFinancialCareers.
[Online] Available from: http://news.efinancialcareers.com/uk-en/154316/goldman-sachs-is-one-the-best-payers-at-analyst-level-what-would-you-rather-have-the-money-or-the-time/ [Accessed on: 1 November 2013]