Young Bankers Fed Up With 90-Hour Weeks Move to Startups

http://www.bloomberg.com/news/2014-05-09/young-bankers-fed-up-with-90-hour-weeks-move-to-startups.html

by arch_stanton • 12 years ago

34 78 12 years ago

wil4214• 12 years ago

Why would anyone knowingly subject themselves to 80-90 hour weeks. The money and success you make in the short term could very well be overshadowed by health problems.

A guy at my work doing high stress support work recently had a heart attack.

nt591• 12 years ago

Money, prestige and the promise of future success makes 22 year olds do stupid things.

rjf19905• 12 years ago

I got a lot of BS answers to this question when I wanted to be an investment banker. The only reasonable answer I got is that it's a low-risk way to make a ton of money. Instead of risk you give up your life and/or health.

billmalarky• 12 years ago

"low-risk"..."give up your life and/or health"

Does not compute.

Nicholas_C• 12 years ago

The opportunities investment banking opens up are fantastic. It's the easiest way, and often times the only way, to get into private equity, hedge funds, or corporate development, and make a ton of money while doing so. It also helps get into a great business school. The modeling/valuation work is also something that I and most finance people find the most interesting, even though that is probably 5% of the job for an analyst. It's something I was and am still willing to do but it's very hard to get an interview if you didn't go to a top school or know anyone in banking, neither of which I have going for me.

I enjoy what I do now, corp finance for a tech company, but banking would be ideal.

hagbardgroup2• 12 years ago

The point is that the older employees are hazing the new ones to limit entry into the company. Employment within finance is declining sharply. It would not be shocking if it returns to its low level of prestige that it was at before the 1980s.

I would say that it's not a great sign that Ivy types are looking to recreate the happy-slappy Greenspan years in another sector.

My father worked for Goldman in the 1990s, up to a relatively high level. He was home at 7 pm each day and would often eat breakfast with us before school, and he rode the subway to work. Now, he would also often be commuting cross-continent and be gone for all the weekdays at a time, and would have to spend some time reading reports and financial journals on weekends, but still he never went through the sort of fraternity absurdities that seem common now, even when he started in the industry in his early 30s.

Also, clients have more options now and can demand more from the banks -- their relative bargaining position is weaker. Being that they're all public companies now rather than partnerships, the entire culture has shifted, and they're under more performance pressure. The raw dollar amounts are much higher, but the core business model is eroding.

OK, if you're a client, do you want to have your account handled by some frenetic kid on amphetamines working 100 hours a week, or do you want it handled by someone with class who is going to likely be with the firm for the rest of his life? Junior on speed is going to die of a heart attack at 27 and might jump to another firm or a hedge fund. Taking your confidential information with him in his head to some other firm who might use that information against you some day.

Why would you trust your business with a team of substance-enhanced Juniors with impeccable academic credentials?

Like Bill Solomon recently said on his 100th birthday (http://www.bloomberg.com/news/2014-04-02/billy-salomon-turns...):

"When you are a partnership there is a different atmosphere,” Salomon said. “You’re working for each other.” That discipline helped instill a culture where clients trusted their advisers, he said."

That trust is gone, and it can't be replaced by just throwing amphetamine-fueled-all-nighters at the problem.

gohrt2• 12 years ago

More on Salomon culture:

http://en.m.wikipedia.org/wiki/Salomon_Brothers#1990s_Treasu...

Ite not "Solomon" :-)

lmm• 12 years ago

If you can do it for say 10 years and make enough to retire comfortably that can sound like a good deal.

(To me the more curious question is why anyone would employ people to do that, given that you get less done in an 80-hour week than a 35-hour one)

Retric• 12 years ago

A huge chunk of finance is selling snake oil to rich people and the appearance that people are working there ass off is vary important.

gutnor3• 12 years ago

Or you do like a friend of mine - you work for 3-4 years like a slave, once you move in the hierarchy you still work 90 hours a week but that now include "networking" activities like golf and extended lunches.

You drag it while you can, buying a new flat cash with the bonus you get each year. At 32, the bank finally noticed, you are fired with a few years salary and you retire in your all-paid luxury flat, enjoy income from your other 5 flats, get kids and enjoy seeing them grow while living in a luxury.

The only problem of that lifestyle is that in the first 3-4 years, you have basically 1 chance in 10 to make it through. After working in such pressure, you are brainwashed, so it takes some serious willpower to first invest your money properly instead of living the high life and then prepare your exit strategy.

edit: the bank finally notice that you are not as eager as the next batch of freshly promoted coworker. So if your department made slightly less profit, you get selected in the next batch of firing that happen generally just before bonus time.

Synroc• 12 years ago

Wait so the bank fired him for buying new flats every year ?

wil4214• 12 years ago

So your friend was the 1 in 10. What happens to the other 9?

For me my priorities are providing for my future family and being there with them. I wouldnt want to be gone when my child walks or other small events early in life.

pessimizer• 12 years ago

People aren't that delicate. I've known factory workers who've done 50-80 hour weeks for decades on end. When I was a machine operator at Harte-Hanks outside of Baltimore, I worked a 76 hour week without a day off for three months straight (12h * 5, 8h * 2). They refused to open the plant on Thanksgiving, so it broke my streak.

Right now, somebody in Germany is wondering how I can deal with only having 2 weeks of vacation a year, and speculating that it could lead to serious medical problems.

My father had a series of mini-strokes after having a pleasant salmon dinner.

wil4214• 12 years ago

When I was a machine operator at Harte-Hanks outside of Baltimore, I worked a 76 hour week without a day off for three months straight (12h * 5, 8h * 2).

Was it worth it though? It doesnt look like you are still at that job.

The salmon dinner didnt cause the stroke, its not usually what you are doing at the time that causes the heart attack/stroke. It was probably the decades of bad health/choices whatever that caused it.

Right now, somebody in Germany is wondering how I can deal with only having 2 weeks of vacation a year

Hell right now I am asking myself why I dont live in Europe.

gohrt2• 12 years ago

50-80, 80-90, 90-110, any difference?

Factory work can be high or low stress, depending on the pacing and risk of injury.

anigbrowl4• 12 years ago

Considering the generally healthy state of teh german economy, maybe they're onto something.

rayiner5• 12 years ago

Most people who go into finance do so right after undergrad, when they're 22-23. Working a few years of 80-90 hour weeks* at a major bank almost guarantees admission to a top business school, allows you to save up a significant amount of money for later ventures, and is a resume line-item that carries almost universal weight in the F500 business world.

*) Although that's more typical of M&A than finance as a whole. My brother is a trader at one of the big banks and probably works more like 60.

stephencanon2• 12 years ago

I have very low expectations for an article that leads with a photo of two “MBA candidates” at Princeton. (Princeton has no business school, so doesn’t award MBAs).

secondForty• 12 years ago

The business school is located right behind the medical school

joeriel• 12 years ago

From Wikipedia (http://en.wikipedia.org/wiki/List_of_Ivy_League_business_sch...)

Two Ivy League universities, Brown University and Princeton University, do not have business schools. Princeton is home to the Bendheim Center for Finance, which specializes in quantitative finance and offers an undergraduate finance certificate and the masters in finance degree.

Edit: The article correctly states that those two individuals are pursuing Master's Degrees in Finance at Princeton. (Photo caption is incorrect though.)

rb2k_• 12 years ago

And for all the fellow foreigners:

"Princeton provides undergraduate and graduate instruction in the humanities, social sciences, natural sciences, and engineering.[13] It does not have schools of medicine, law, divinity, education, nor business, but it does offer professional degrees through the Woodrow Wilson School of Public and International Affairs, the School of Engineering and Applied Science, the School of Architecture and the Bendheim Center for Finance."

acheron• 12 years ago

Over near the law school, right?

http://www.lettersofnote.com/2011/11/dear-princeton-law-scho...

blatherard• 12 years ago

It now reads "master's candidates in finance", which is a program at Princeton: http://www.princeton.edu/bcf/graduate/

collyw• 12 years ago

Are startups not another area where working silly hours is considered somewhat normal?

rjf19905• 12 years ago

Startups are rarely as bad as banking, where you can do 100 hour weeks several weeks in a row, have vacations canceled, miss weddings and funerals. Even though you're expected to work more at startups, most founders realize their employees need time off. I could be wrong, but I'd say a majority of startup employees work less than 60 hours per week.

Also the work at investment banks is boring and monotonous. Doing 100 page pitch decks, knowing very well that 90 of them are going to get thrown out.

Hansi• 12 years ago

Banking != investment banking. I work in asset management I do a 45 hour week most of the time, with very few exceptions.

levosmetalo• 12 years ago

Startups might be better than banking, but the very idea of praising "majority of startups" for working "less than 60 hours per week" best describes the whole brokenness of the startup model for startup employees. And no, there is no "necessity" in working insane hours, it's just the wish of startup founders and owners to succeed per all costs, especially it that cost is someone else time / money.

bnastic• 12 years ago

Life of a programmer in investment banking can be much better in pretty much every respect compared to your typical internet startup (pay, working hours, availability of "toys" and exposure to new tech, etc.).

If you're thinking MBAs, then those 100 page pitch decks that lead nowhere can happen in any industry in equal measure.

sbilstein• 12 years ago

Yea I don't think I've ever met a startup employee that regularly puts in 100 hours weeks the way bankers do. Last time I was at a startup, 50-60 was normal, though some crunch periods were closer to 70. My banker & consultant friends on the other hand seem to have terrible balance and much less interesting work.

Daishiman• 12 years ago

Yes, but it's not a badge of honor; it's a matter of necessity, and the tech world nowadays is sufficiently aware of the performance detriment that comes with working long hours.

nutjob2• 12 years ago

...move to startups and 120 hour weeks.

francoisdevlin• 12 years ago

People don't understand the value of their time, news at 11.

insteadof• 12 years ago

You've already given out the news, it's the film that comes at 11.

morgante2• 12 years ago

While some certainly choose to leave finance for startups, I think they and far between. Who in their right mind chooses to give up a huge salary in favor of an equivalently time intensive startup which pays 1/10 as well?

data from the U.S. Census Bureau show that the number of employees aged 25 to 34 in the New York metropolitan area in finance and insurance fell to 109,187 as of the second quarter of 2013, down 19 percent from the second quarter of 2007.

This definitely has nothing to do with the financial crisis which happened in the intervening years and the ensuing mass layoffs on Wall St.

vanderZwan3• 12 years ago

Who in their right mind chooses to give up a huge salary in favor of an equivalently time intensive startup which pays 1/10 as well?

If that one tenth the salary is enough to cover your monetary needs, then why pay the price for the other nine tenths?

morgante2• 12 years ago

If that one tenth the salary is enough to cover your monetary needs, then why pay the price for the other nine tenths?

What price? I think startup hours are nearly as grueling as those in finance.

enraged_camel2• 12 years ago

It may be enough to cover your needs now, but most people want to be able to do things like support families and save for retirement.

(Granted, 90 hours a week is terrible for family life.)

rayiner5• 12 years ago

I couldn't make it through the first few paragraphs of this article, which used the drop in the percentage of students at HBS/Wharton going into finance as an indicator that somehow these folks were going into tech because they were "fed up" with 90-hour work weeks. Comparing data from 2006 and 2007 to current data is meaningless. The banking industry has retrenched tremendously in the financial crisis. While the top banks are still very profitable, they are doing more with less, and laid off 500,000 people between 2008 and 2012: http://www.huffingtonpost.com/2012/04/25/wall-street-layoffs....

jtheory• 12 years ago

A sign of how nonsensical it is -- here's their fix:

Junior bankers who keep lighting up red, and the people who manage them, typically get a call from Urwin to find out what they are working on and if the hours are justified. If not, the manager requesting the work may get a warning.

So if your underlings keep lighting up red, they'll check to see "if the hours are justified", and you may get a warning if they are not.

In other words -- we don't want you killing the junior bankers just for your own entertainment; please only kill them if it's going to make us a lot of money. THEN it's just fine.

tzier2• 12 years ago

A "warning" typically just leads to analysts eating hours (not recording all the hours they actually worked), especially for fixed fee projects.

QuadDamaged• 12 years ago

Here in London, Barclays is about to boot 7k staff from its investment banking division. The writing was already on the wall for contractors, bankers looking for another industry is par for the course.

Zigurd• 12 years ago

What's really interesting is what is absent from the article: An actual reason for junior employees to work 90 hour weeks.

There is no plausible task or process in ibanking that requires that. It amounts to a form of hazing. It's an industry gratuitously consuming the people in it, as if that would justify their subsequent compensation.

Here is a telling quote:

“Culture really matters,” says Podolsky, 33, a Wharton graduate. “How the bullpen interacts is critical. You can work 80 hours a week and not mind it so much because the people you work with are awesome.”

Not a hint, not a whiff of why this culture matters. Why wouldn't it be forgotten 5 minutes after it's over. It's an unusually pure delusion.

anigbrowl4• 12 years ago

Well, people are proud of being competitive; but more to the point, if they like the sort of work they're doing, then they don't mind doing it to extremes, for a while at least. I do film production, and when that's in full swing it's 80-hour weeks, albeit for only a month or two at a time. It's not all that profitable (partly because I can't move to LA), and work product is sadly lacking in cultural value as often as not, but the work itself is very satisfying.

jroseattle2• 12 years ago

This article got me thinking about the frying pan (investment banks) and the frier (startups.)

I just pulled an all-nighter in my company (note: I'm our CTO). We needed to put a new capability in for our team as part of a rollout of a big new feature that integrates with other customers. I was glad to do the work and put in the time.

I just so happened to interview a candidate the following day (I think it was hour 34). He's very eager -- wants the "fast-pace of a startup", "meaningful work", "make an impact and see the results". He currently works at TechBigCo in Seattle -- take your pick, I hear the same words over and over from candidates who work at these places.

We talked about what it's like at our company, and I explained what we just went through with ALL the caveats -- atypical, I made the decision on timing, it's a startup, etc.

The candidate was completely turned off and said he could not work for a place that would ever condone that amount of time or that decision. I explained that my team didn't pull an all-nighter -- I was the one who did, because I made a decision (business ultra-critical level), and that decision would affect only me in terms of time. I explained that it's because I have a vested interest in seeing the company succeed. He didn't accept it and has dropped out of consideration for our role.

The candidate's response surprised me -- he viewed my action, even as a one-time event, as something that could happen again in the future. He's right -- it very well could, although we're managing our growth (much of the cause of this situation) to balance against our resources. We also have a business to grow, and sometimes success can be dictated by timeframes. That was the case here.

talmand4• 12 years ago

Was it mentioned what was going to happen after the time spent on the project?

If I were that candidate and it was mentioned that once the emergency was past you were going to take two or three days off (not counting against days off) to unwind, then I would take that as a fair trade of time.

If it was expected for you to show up the next day and continue on as if nothing happened then I would pass too. That's a sign your company doesn't respect people's time. Which as CTO reflects on you.

The rules may be different for you being CTO and you have a vested interest in the company succeeding, but it's hard to communicate that to someone that you also don't have vested interest enough to get someone else to spend the extra time with no real recognition or compensation.

tomp3• 12 years ago

Same here. I'm not a C*O, but if something needs to be done, it needs to be done, and sometimes I'm the only one that can do it. Even if it's late evening, or during the weekend (e.g. because some employees are in a different timezone with different holidays). In exchange, I expect the management to understand that sometimes, I need to leave early/take more days off. That's I believe a completely fair tradeoff.

jroseattle2• 12 years ago

Yeah, all things mentioned that you would expect as reasonable -- this was strictly my decision, I didn't ask this of anyone else, and indeed I'll take some time because I could use the rest.

The candidate still wasn't accepting of any decision. Frankly, I don't think it was the timecrunch that really bothered him -- it was the effort associated with it. Purely a hunch on my part, but I think there is a question of adaptability, task-switching and dealing with re-prioritization.

As for expectations I set with my employees, I insist on work/life balance. Several on my staff have kids (I do as well). A few are in soccer leagues. Others do only knows what in the off-hours. My expectation is that time away from work greatly enhances productivity when at work, so it's a payoff for us. We have long-term goals, and I want to keep the crew we have around us happy and hungry (for success.)

protomyth3• 12 years ago

How much of this work is the result of the US tax system?

rayiner5• 12 years ago

You mean the finance work? Although almost all of it has tax implications, most actual tax work is handled by accounting and law firms. The finance folks do the bread and butter of corporate financial transactions and asset management. They underwrite IPO's, put together bond issues, arrange lines of credit, and work out mergers and divestitures. Very little of it arises due to the tax system. Even the law firms doing the legal side of these transactions don't devote huge resources to tax. The NYC firm where I used to work, which had a top-rated tax practice, had about 1/10 as many lawyers working on tax matters as they did working on M&A or securities matters. I'd imagine the accounting firms have a higher percentage of tax people, though.

protomyth3• 12 years ago

So, if a federal flat-rate tax[1] was set, it wouldn't significantly reduce the workload?

1) revenue * tax rate = taxes (asking question, not advocating)

tzier2• 12 years ago

From a hiring perspective: if you're at a start-up, take advantage of the trend and try to hire these people who want out after their 2-3 years. They know how to get stuff done in crunch periods and are still young enough where their creativity hasn't been (totally) crushed. Bonus points for a former Big 4 auditor--they tend to have the same work ethic but without the entitlement. [1]

Disclaimer: former Big 4 auditor but used to run a finance org, so have tons of friends in both (many of which have made the transition)

[1] Bit of a stereotype here, but most i-bankers get used to the huge salaries and massive expense budgets, which auditors and tech startups don't have.

talmand4• 12 years ago

“I’m not sure how you stop work if there’s a deal on..."

This makes me the think the guy is totally clueless and doesn't understand time management. Why is it that these types of people think you absolutely must squeeze in two weeks worth of work in three days? What's so important that you can't take the time to do it properly the first time without doing it in a manner that almost literally kills the staff? What's wrong with saying "hey, you've been on this for ten hours today, go home and rest up to hit it fresh in the morning"? Seems logic dictates productivity would increase in that case.

Then he follows up with "Hey, have we got this right?" If you don't realize that right off after someone freaking dies essentially doing their job then you are clueless.

But, I'm a developer, so what do I know?

crazypyro2• 12 years ago

Banking moves fast. Can you seriously not imagine one of the hundred possibilities that would require immediate action? Banks also have huge customers that they simply don't say "No" to, without consequences.

talmand4• 12 years ago

I can imagine situations that require heavy hours to accomplish in the time frame required. I'm a developer, I do it all the time but not as a standard work week.

But I cannot imagine that there is always a situation one after the other that requires people to put in that amount of time for weeks or months at a go.

If they are working their people that much for that long, they haven't hired enough people to cover the workload and are taking advantage of the people they do have.

gadders• 12 years ago

The thing is, you do have to work hard for those Investmen Banking/M&A type jobs, but do you seriously think jobs with a £2m+ earning potential would be given away?

You're better off thinking of your first few years as the office equivalent of Hell Week for a Navy Seal.

Young Bankers Fed Up With 90-Hour Weeks Move to Startups

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