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Message boards like Wall Street Oasis and Reddit remain filled with complaints from junior investment bank analysts about long work hours and the resulting impact on physical and mental health. They implore their employers to support them better.
These demands have once again come into focus following the news that a Bank of America banker with associate rank died suddenly in March. The tragic death of the employee, a US special forces veteran, has not yet been specifically linked to overwork. But the news has mentioned intense 100-hour weeks before his death.
Discontent cannot be separated from what happens at the top of the food chain. It also increases pressure on partners and CEOs to step up the work that keeps younger employees in the office all night and on weekends.
That pressure may not generate much sympathy, given that these high-level financiers stand to make millions. But some bankers say the seemingly glamorous job of jet-setting and managing boardroom intrigue has become more complicated than ever. Employers are demanding high rates while offering less patience than ever for falling short in any given year.
With that kind of sword hanging above, it seems there is no choice but to force everyone below to try harder. Companies are simply crossing their fingers, hoping to avoid a bad incident that makes headlines and ruins the perception that Wall Street has become kinder and gentler in the modern era.
Three years ago, amid an unprecedented deal boom during the pandemic, investment banking analysts complained about overwork and a lack of compassion from their bosses. After a backlash, they won big pay raises, new benefits, and supposed protective measures to guard against burnout, including active efforts to monitor and limit hours worked.
The grievances have now returned even if the agreements have disappeared. The dearth of initial public offerings and mergers and acquisitions has led senior bankers to make more pitches. Banks maintain various types of customer relationship management software to track such industriousness. Some go so far as to account for email activity, calendar entries and phone call logs, one top banker said.
“It’s really the presentations and PowerPoint work that consumes a lot of time and the dissemination of compositions.” [typing company financial data into spreadsheets] and stuff,” said one investment banking analyst who questioned the effectiveness of the marketing attempts. “I would also be interested to see the data on the number of launches per year and mandates won.”
Some banking CEOs are already reflecting on how AI can be deployed to reduce costs and workloads, but keeping customers top of mind remains a priority even if any particular playbook isn’t as helpful. A veteran banker now working at a Fortune 500 company said customers were less loyal than ever and required much more sales skill.
Another veteran banker-turned-corporate executive said that even as some banks like Credit Suisse and Lehman Brothers faded from the picture, the business remained intensely competitive. Aside from the rise of boutique firms, perpetual losers like Wells Fargo have developed credible trading arms.
At the same time, large companies need fewer outside bankers, as they have developed their own sophisticated internal teams that can perform the financial analysis previously performed by outside bankers.
Increasingly, boutique companies promise CEOs a specific reward or a portion of what they take in for a year as a way to motivate them to work as hard as possible. Many of the largest boutiques are also publicly traded and have specific annual margins and growth targets necessary to please public shareholders and keep their stock prices high.
The riddle of the management challenge is obvious: how to maximize results while ensuring the machine underneath doesn’t break down. One boutique chief executive admitted that banks had overhired in the frenzy of 2021 and that many had not had the “difficult conversations” of telling stragglers they were not good enough to remain managing directors.
The recently retired banker was pessimistic that these tensions in the incentive system between junior and senior bankers could be easily resolved. The typical investment banking executive or group head rose to that position without ever demonstrating management skills or even a curiosity to understand human resources.
“Big revenue producers are horrible managers,” he said. “It’s a real problem. Empathy, listening skills, many of these people don’t have them.”