Hear the analysts tell it, and aspiring investment bankers should think long and hard about what’s important: A fat paycheck with nice bonuses — or your sanity.
“M&A turns people into sociopaths,” says a first-year analyst from a boutique investment bank in a new survey on the industry’s work conditions.
“Rough hours due to small team and a ton of dealflow,” adds Piper Sandler analyst.
“No free coffee. Feel like that would solve a solid amount,” opines an associate at Credit Suisse.
Meanwhile, an associate from Citigroup sums up the job in just four words–perhaps because he didn’t have the time to write more. Twenty percent of Citigroup bankers reported working 90+ hours per week, with another 5% working more than 100.
“This is all bullshit,” he says simply.
WSO 2022 IB Work-Conditions Survey
In March 2021, the “Goldman 13” released a slick but brutal slide deck revealing the firm’s working conditions, based on an informal survey amongst 13 first-year analysts. They reported sleeping an average of five hours per night, rated their job satisfaction as 2 out of 10, and said they were likely to leave the company within six months if conditions did not improve. Their big ask of Goldman? Cap workweeks at 80 hours instead of the nearly 100 hours they’d been toiling through during the early work-from-home days of the pandemic.
The deck ricocheted around social media and was covered by the New York Times, Bloomberg, and numerous other outlets. Wall Street Oasis–an online community, news site, and career center for people working and aspiring to work in finance related fields–wanted to see if work conditions at other investment banks were better, worse, or on par with what the Goldman 13 had reported. WSO published its own survey in April 2021, and completed a second survey this spring.
“Our hope is that publishing these numbers continues to get the attention of leadership and try to reduce the mental abuse at the junior levels that is still far too common,” Patrick Curtis, founder and CEO of Wall Street Oasis, wrote in the introduction to the 2022 Investment Banking Work-Conditions Survey. “We still strongly believe that investment banking is an incredible career and leads to a very attractive set of options, however, we want to make sure we put the mental health and safety of our community first.”
Spoiler: While WSO’s survey did find some improvements over the last year, the work-life-balance of junior investment bankers is still far from, well, balanced. We’ll speak more to that in future stories. Below we broke down some of the highlights from the 2022 survey.
WSO’s survey collected responses from 485 bankers from investment banks of varying sizes in March 2022. Of respondents, 71.6% (348) were first-, second-, or third-year analysts; 20.2% (98) were associates; and 4.7% (23) were vice presidents and directors. Further, 38.6% (187) of them worked at bulge bracket banks, 56.5% (274) worked at boutique or middle market banks, and 5% (24) did not specify.
Overall 52% said they are not satisfied with their current pay, 14% averaged 91 or more hours of work per week, and 75% say their work hours have negatively impacted personal relationships. They also reported a 28% decline in their mental health and a 33% decline in physical health from before accepting their current positions.
Some of the best insights come from respondents’ quotes.
“Lots of work, but with the ability to mostly set my own deadlines (within reason). Lazy, checked out VPs with a small hazing streak have made life harder at times. Highly political environment, but possible to rise above it all. Junior abusers have been well handled by management and it is no longer an issue of late,” says a real-estate banking associate at a boutique bank. “Health and number of hours have been difficult to manage. Cash compensation last year was highly disappointing and poorly handled. Compensation is improving due to retention issues.”
HOURS & PAY
In January, Poets&Quants reported that the big takeaway from WSO’s 2022 Investment Banking Industry Report was this: You can have a truly astronomical salary as a new investment banker, or you can have a manageable work-life balance. It’s increasingly hard to have both.
Indeed, investment banks were having a harder time holding on to analysts, forcing banks to compete with consulting firms for interns and first year analysts, driving up salaries at consulting firms, and driving them up even more so for starting bankers, Curtis told us at the time.
“It’s a work-life balance thing, and it’s a new generation thing where younger people actually value that more. It’s one thing to hear you’re going to work 80 to 90 hours per week, it’s another to live it,” he said. “The banks are losing a lot of kids even after that first bonus cycle, and private equity firms are more than happy to snatch up good talent early on. People are even joining startups, or working in corporate development or corporate finance.”
The work conditions survey, however, shows that for many junior bankers, even the pay isn’t worth it. More than half of respondents, 52%, said they are not satisfied with their compensation.
Meanwhile, they are working, on average, 77.73 hours per week while sleeping an average 5.97 hours per night. Some 14% have averaged 91 work hours or more during 2022, and 4% averaged101 hours-plus. Up to 33% are managing less than 5 hours of sleep or less per night.
“Pay sucks! Well below market, they’re a bunch of cheapskates!” says a first-year analyst at a bulge bracket Financial Institutions Group (FIG).
A second year analyst in M&A at a boutique agrees: “Workload is very manageable, but comp is insanely under market. Is hard to stay when the market is so hot and comp is so high for banking / PE.”
MENTAL AND PHYSICAL HEALTH
How do the grueling hours and tight deadlines affect bankers’ health? Well, negatively, the survey found.
Respondents were asked to rate their mental and physical health on a scale from 1 (poor) to 10 (excellent) before accepting their investment banking job compared to their current states.
Before starting their current jobs, bankers overall ranked their mental health at a mean of 8.0 and their physical health at 8.1. Now, the same bankers rank their mental health at a mean of 5.6 and their physical health at 5.1–a decline of 2.4 points and 3 points respectively.
Culture certainly plays a role as well. According to the survey:
- 66% of respondents say they frequently face unrealistic deadlines
- 75% say the long hours have impacted relationships with family and friends
- 38% have considered counseling or therapy to deal with work-related stress
- 50% have faced excessive micromanagement
- 25% feel like they’ve been the victim of workplace abuse
BRIGHT SPOTS & WHAT IT ALL MEANS
Overall, respondents were more rosy about investment banking this year than in 2021, and we’ll parse those differences out in more detail in an upcoming story. Generally, respondents are slightly more likely to leave their firms within six months this year than in 2021, but they also report being more satisfied in both their work and personal lives.
There’s also differences in conditions at the different types of banks (bulge, boutique, and middle market) and between individual banks themselves. Where you work matters, in other words. The survey breaks up comments between the different types of banks to offer a flavor of culture in each category. We'll dive deeper into individual banks in an upcoming story.
Judging by the selected comments of survey respondents, there are certainly some bankers happy in their chosen professions.
“I might have the best team in banking tbh,” declares an analyst with Société Générale. “Hours are terrible but fantastic learning experience and overall great team in Baird Industrials,” reports an analyst with Baird & Co. And an associate at Janney Montgomery Scott says, “"It's a great culture, tone from the top is excellent."
What does it all mean? Generally, it seems like investment banking is grueling, intense, and requires great sacrifice, but it’s hard to say if or how much worse it is than other demanding industries without similar surveys with which to compare.
A vice president at Brown Brothers Harriman puts it this way: "You should know what you're getting into. It sucks, but at this point you should know."
Read WSO’s full 2022 Investment Banking Work-Conditions Survey here.