Why Top Graduates Still Want To Work 90-Hour Weeks On Wall Street
The thinking, outlined in a recent article in The New York Times, is that the falling prestige of Wall Street means that banks are having to compete for talent with other industries, the perk- and stock-option-laden tech sector in particular. That banks are reevaluating their internship programs and curbing famously long weekend hours is cited as more evidence for the trend.
"It's a generational shift," a 24 year old former Bank of America analyst told The New York Times. "Does it really make sense for me to do something I really don't love and don't really care about, working 90 hours a week? It really doesn't make sense. Banks are starting to realize that."
But is Wall Street really losing ground? We're not convinced.
Pay has fallen from its pre-crisis heights, but the average Wall Streeter still makes $300,000 according to the New York State Comptroller. A recent graduate of Harvard Business School going into finance averages $125,000 for their base salary alone. Entry level base salaries at top banks are still in the $70,000 to $90,000 range, and bonuses, though not matching the base like they used to, are still extremely large.
Only consultants have higher average salaries out of HBS. And though Silicon Valley pay is high and getting higher, the only tech jobs that compete with Wall Street are certain types of programmers and engineers - and people who go for those jobs were never going to end up as analysts and traders anyway.
As for business and finance roles in the tech world, these tend to have lower salaries than on Wall Street. Salaries for MBAs are substantially lower in the tech world as well.
Although more MBAs and recent graduates are going to tech companies now, this appears to be mostly because there are more jobs. There are fewer jobs on Wall Street, but they are as sought after as ever.
The percentage of Harvard undergraduates going into finance is down from its pre-crisis peak, but is back up to 15%, growing from last year. The number of Princeton graduates heading to finance has grown back to 22% in recent years after a low in 2009. That's below historic highs, but not far from the average.
As for those awful hours people work on Wall Street, they've never dissuaded the types of people attracted to those careers before - and those people don't overlap much with people inclined to work in California for a tech company.
Finance blogger The Epicurean Dealmaker sums it up nicely:
"1) since Wall Street is shrinking we don't need as many junior resources as before, 2) the number of college graduates who simultaneously aspire to be J. Pierpont Morgan and Steve Jobs (or even Bernie Madoff and Mark Zuckerberg) is now and always has been nil, and 3) if having an in-house masseuse, pool table, and artisanal toast barista is important to your career satisfaction, you were never going to last longer than 15 minutes on Wall Street anyway."
Though investment banking means lots of late nights and weekends, that's a function of the way work gets done, and the daytime can be pretty sedate, with people getting into the office on the late side.
Also after a couple of years working those insane hours, you can leave to get an MBA, to another job with marketable experience, or upward within the finance industry.
The one area where Wall Street might be less competitive is in competing for incredibly bright engineering and quantitative types. Pre-crisis, they were in high demand to structure and sell hugely complex derivatives. There are far fewer of those jobs in the aftermath of the financial crisis, and the regulation that followed.
The changes in hours are more about responding to negative news stories than any worry about attracting talent.