There are so many things to do these days other than be a hard-charging investment banker or trader: Even Goldman Sachs Group Inc. has to offer more than just a ladder to riches to keep its people on board.
Banks like Goldman Sachs and JPMorgan Chase & Co. were much quicker to demand a return to the office than some rivals year. It was a bet that their halls of power were a bigger draw and that staff wouldn’t leave for lesser names in finance. But they missed half the picture; there are more alternative careers and lifestyles to tempt their people away.
Goldman Sachs will soon offer staff more of the soft, non-monetary benefits that have become increasingly common for enlightened employers everywhere: expanded leave for family care and bereavement, for example. “We are committed to providing differentiated benefits and wellness offerings to support your wellbeing and resilience,” said a memo sent Monday by the bank’s top executives, first reported by the Wall Street Journal.
Wellness was never a thing on Wall Street until now. Don’t be fooled — the top end of investment banking will remain a grinding battle of stamina, attentiveness and a sheer will to win. But Goldman Sachs and its rivals are trying to make it more acceptable to take pit stops, giving people more official signs they can raise to justify going offline.
Why? The biggest banks and white-shoe law firms are finding it harder to retain people, who are looking at the years of hard slog ahead and thinking there must be something better. Probably people always thought this, but in the past there maybe weren’t so many options.
Sure, there was always a chance of getting into hedge funds or private equity, although the latter has now grown into such a sprawling financial system of its own that it is sucking up more human capital than ever before.
But today, there are also high-paying possibilities in areas like technology or fintech or crypto-linked entrepreneurialism – and these options may come with fewer of the endless work hours and street fights needed to win deals or trade marginally better than the next person.
Younger people are just less willing to accept this and are leaving after a couple of years. Investment banks have bumped up base salaries above $100,000 (though many aim to keep a lid on total pay, meaning smaller bonuses). They have offered Caribbean holidays and even free Pelotons to try and keep younger staff happy.
Millennials and Generation Z have a big advantage, however: They have been raised entirely in an internet world where it is easier than ever for someone talented, smart or determined enough to make their own way commercially.
More than one-third of Europeans already earn extra money through doing something on the web and one-quarter of those plan to quit their day job within six months, according to research from Morgan Stanley last week. They are making money from newsletters and videos, from selling goods online, or from trading crypto and other tokens. They are typically under 35 years old and work in computing, finance or engineering.
The Great Resignation isn’t just about Lying Flat, according to Morgan Stanley’s analysts. It’s also about turning the side hustle into the main hustle because you can.
At the big investment banks, there are people so determined to manifest their own Alpha-ness that they’ll do all of this and more. At the same time, those most appreciated by their own firms and perhaps most coveted by others have already been able to negotiate time away to do other things: Competing in the Great British Bake-Off involves a long break from normal duties, for example.
At Goldman Sachs, I’d bet those most determined to reach the top roles might never use any of the new allowances. But the point is that leaders are being forced to recognize and allow for the need to take some time occasionally without being stigmatized for it. That has to be part of the life on offer for big banks with more competition from alternatives.
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