Juniors shun banking for work-life balance: ‘We don’t have to hang out in the office until 2am’

Investment banks that have typically relied on a stream of junior lawyers, consultants and Big Four accountants to replenish their ranks are watching those pipelines of talent dry up.

For that, you can blame the back-to-the-office push. Banks asking dealmakers to come back to the office full-time, even if firms have formal hybrid schemes in place more broadly, are losing out.

Other sectors with similar hard-charging reputations now offer better work-life balance, executives say. Law firms, private equity companies and Big Four accountants — the sectors banks compete most fiercely with — are winning the best candidates.

Hierarchical and face-time culture has meant long-suffering juniors spend 100-hour-plus weeks toiling away on PowerPoint presentations and spreadsheets to aid their bosses’ fee-luring deal pitches. The payoff for these grueling hours is a golden CV — but some are not willing to make the trade off.

Junior M&A lawyers at top firms are typically “heavily” targeted by banks’ recruitment teams after three years, according to Rebecca Maslen-Stannage, chair of Herbert Smith Freehills. But now, she told Financial Newsthey’re increasingly choosing to stay the course in law — and flexible working is a key reason.

READ Hybrid work scrapped for bankers as job cuts loom

“They can still be on super interesting transactions and be right at the heart of those types of deals, but do not have the face-time concept that some of the investment banks have and to be able to be flexible about where they work from,” she said.

Banks have worked hard to stem a huge amount of churn among analysts and associates over the past year. Entry-level pay has swelled from around £50,000 to £70,000 at most firms, as a surge in deal activity led to a burnout crisis that resulted in 70% of juniors leaving at some banks.

‘So outdated, it has to change’

JPMorgan, Goldman Sachs and Nomura have also rolled out one-off recruitment sprees for analysts to bolster their teams and alleviate workloads. Recruiters told FN that banks were increasingly turning to accountancy and law firms for talent as well as rivals.

Jonathan Boyers, a partner at KPMG UK who leads its corporate finance practice, said that banks keeping juniors in the office until 2am to 3am was “so outdated, it has to change”.

“People don’t want to work like that anymore,” he said. “We’ve had several people leave for investment banks over the past 12 months and come back. They said it was ridiculous the way they were expected to work.”

At Bank of America, Goldman Sachs, Citi and Barclays, among others, a five-day week in the office with some flexibility is the norm for bankers, dealmakers have told FN. Most JPMorgan dealmakers are in four days a week, with more senior staff coming in every day.

Better flexibility

“Certain law firms and the Big Four are a lot more flexible than investment banks,” said Emanuele Cianci, a director at legal recruiter Fox Rodney who specializes in the financial services sector.

Herbert Smith Freehills asks its lawyers to be in the office for an average of 60% of the time, although it said that the split is not rigorously enforced. Even US private equity-focused law firm Kirkland & Ellis — which has a reputation as a place where junior lawyers can expect to burn the midnight oil — has adopted flexible working.

The firm told its lawyers that from March 29 they are expected to be in the office on Tuesday, Wednesday and Thursday. US law firms Shearman & Sterling and Fried Frank have told lawyers they can work remotely during August.

The Big Four accountancy firms — KPMG, EY, Deloitte and PwC — have all also adopted hybrid working post-pandemic. PwC has told its staff that they can clock off at lunchtime on Fridays in June, July and August.

Meanwhile, private equity firms — which typically hire top bank analysts after two years in the sector — have been increasing the recruitment of juniors over the past year. Gail McManus, chief executive of Private Equity Recruitment, said that junior bankers are increasingly vetting prospective employers based on whether they offer flexible working.

“There’s so much demand, it has shifted from a buyer’s market to private equity firms selling their company to prospective employees,” she said.

“Juniors often make a decision on whether they want to work for a company after the first interview. There are plenty of private equity companies that demand their employees are in the office five days a week, but more are realizing that flexibility is a selling point.”

Does in-office time impact bonuses?

Bank executives have long touted the need to get juniors back to the office, citing an apprenticeship culture and the need to train 20-something bankers in person. Senior dealmakers contacted by FN said that juniors hired during the pandemic were not as competent as those who spent their first two years working alongside seasoned bankers.

Meanwhile, three banking analysts contacted by FN said that they have been told to be in the office at least four days a week. “But if a senior banker is in on a particular day, juniors are expected to follow suit,” said one.

Dealmakers are increasingly being pressured to come into the office full-time when they are not traveling on business, FN has reported. As banks gear up for a fresh round of job cuts, it is important to be seen, they said. Juniors, however, suggest that the behavior of senior bankers means they are spending more time in the office than necessary.

“Covid has taught us that we don’t have to hang out in the office until 2am to get things done — it would be good if they would trust us to get the work completed at home,” said one analyst at a bulge bracket bank .

READ Banks in staffing crisis as 70% of burned-out juniors flee: ‘This is ridiculous’

However, Claudio Antonini, a former investment banker turned career coach who works with finance professionals, said many juniors became uncomfortable with the blurring of lines between work and home during the pandemic. He said that one client took breaks from showering in order to check their email, while FN interviewed analysts during lockdowns who brought laptops with them during toilet breaks to remain online.

“They are anxious because they fear that if their manager doesn’t see them online for a few minutes, they will think they are not working,” said Antonini.

“Spending less time in the office means they can be seen less by their superiors, damaging their next bonus or promotion as there is a lot of face time in banking,” he added.

Boyers said that some juniors in the corporate finance division of KPMG were realizing that working conditions were more important than the lure of bigger pay packets.

“We have had people leave to go to investment banks for a lot higher potential bonuses, then they come back because the working conditions were atrocious,” he said.

To contact the authors of this story with feedback or news, email Paul Clarke and James Booth

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