While bankers may have once worn their impossibly long hours as a badge of honor, larger cultural forces are threatening to upend that tradition. Nowhere is that more clear than in the recent case of Justin Kwan, an investment banker recently fired by Barclay’s.
Kwan sent an e-mail to a group of summer interns at Barclay’s, warning them of the brutal schedule and frat-style hazing they were soon to endure. Kwan, who patterned his unsolicited advice on the Ten Commandments, recommended interns bring a pillow to the office for the inevitable nights spent sleeping under their desks. He also encouraged every intern to carry an extra tie, in case a senior banker ran out of napkins at lunch.
While this hardly rises to the level of indecency, it was enough to cost Kwan his job at Barclay’s — and a second job he was preparing to take at The Carlyle Group, one of the world’s most prestigious private equity firms.
A few years ago, Kwan’s e-mail may have done little more than raise a few eyebrows. Today, however, it’s entirely out of step with the messaging coming from most large banks and financial firms. While the culture at these firms may have yet to change much, corporate leaders in the space have taken steps to make cultural change a priority. Kwan may have not gotten the memo, but you be can certain his colleagues and other young investment bankers are now fully aware of the shift.
Why Wall Street culture is changing
So what’s driving Wall Street’s sudden aversion to grinding young associates down with 90-hour work weeks? Concern for the physical and mental well being of young bankers?
Perhaps — but there’s another factor that’s almost certainly pushing this change: money. Wall Street is locked in a hyper-competitive battle with Silicon Valley for the best and brightest young workers coming out of America’s premier universities. The potential to earn huge money in finance has always been extraordinarily appealing, turning Ivy league schools into a feeder system for Wall Street banks.
The economic turbulence of 2008 disrupted that pipeline to some degree, by lowering salaries and bonuses. Meanwhile, the ever-rising cultural cachet of Silicon Valley made jobs with technology firms even more attractive to recent graduates. Last year, Bloomberg published a feature about an exodus of young bankers, most of whom went from elite Wall Street firms into the waiting arms of elite startups. Despite salaries reaching the low six figures, many young bankers felt the demands of a industry requiring routine 90-hour work weeks (or 120 hours during the busiest stretches) were simply intolerable.
Fighting brain drain
Barclay’s quick decision to part ways with Kwan shows a new desire to limit media horror stories about the punishing nature of a young banker’s work load. The prevailing narrative — which suggests that young bankers will be miserable regardless of compensation — makes it difficult for banks to compete for high-end labor. Several major banks have introduced policy changes that will ease the burden on junior bankers. Goldman Sachs, JPMorgan and Credit Suisse have all limited the number of weekend hours junior bankers can work.
This is excellent news for aspiring investment bankers and other finance professionals. Concerns about work and life balance have long been the chief downside to a career in the field. Any steps in this direction — no matter how incremental — represent good news for those who want to enter the business.
It’s important to realize that things won’t change overnight, however. Wall Street’s culture is deeply ingrained. Many in the industry also believe the long hours serve a critical purpose, separating those who are truly dedicated from those who don’t have the necessary drive.
If you’re looking for a job in banking today, it’s a good idea to bear these new developments in mind. While a willingness to work exceptionally long hours is still required, many firms want candidates who are well-rounded. It’s important to have interests that aren’t career-related.
And unsolicited, tongue-in-cheek group e-mails to summer interns? As Justin Kwan could tell you, those are rarely a good career move.