“It wasn’t that I couldn’t cope. It’s that I didn’t want to cope.” So says a twenty-something year old who left Goldman Sachs after two years on its graduate scheme. “I didn’t see why I ought to.”
The knowledge and skills that came with the job were simply overshadowed by an unsustainable lifestyle of working nights and weekends without commensurate pay.
This young graduate is a “millennial”, one of the generation born between the early 1980s and the late 1990s. Now they are aged between 18 and 33 years, in the early part of their career.
It is a generation that appears to put a higher value on fulfilment, entrepreneurialism and a good work-life balance than cash. The implications for the investment banks and City firms who are trying to hire and hold on to them are serious.
“To motivate my generation was easy, you threw scraps of cash at us and kicked us,” says Simon Collins, UK chairman of KPMG. “This generation is looking for meaning in life, which candidly and shamefully I don’t think our generation was.”
At London Business School , the percentage of MBA graduates going into the financial services industry fell from 46% to 28% between 2007 and 2013. The percentage going into technology companies more than tripled in that time, from 6% to 20% .
And the fast-moving consumer goods sector has knocked banking off the top spot for the first time as the profession of choice for business graduates, according to a survey by consultancy Deloitte.
A common millennial complaint about working in a bank is that “the sacrifice is huge and the benefits are no longer game changing,” according to a former Goldman Sachs employee.
Bonuses have been reduced by regulation and more pay is given in deferred stock options. There are promotion bottle necks, as older staff stick around until they can exercise those options. In the heady days before the collapse of Lehman Brothers those people would probably have already made enough to retire.
This comes at a challenging time for banks. Regulation is eating into profitability and restricting staff compensation. Tech entrepreneurs are the new rockstars. And banks are facing more scrutiny of their working practices after the death of an intern atBank of America Merrill Lynch last year and a spate of suicides.
For graduates, a job is no longer a job for life. More than ever, they see banking as a way to learn skills before moving on to something else.
Moreover, candidates are coming into the job application process better informed: social media and websites such as Glassdoor encourage people to share their experience of company culture, pay and horror stories, while networking tools such as LinkedIn make it easier to see what other jobs there are.
For those who stay at banks, promotions are harder to come by. Goldman Sachs now promotes a class of managing directors every two years, rather than annually.
Banks used to worry that a graduate would choose a rival. This has been replaced by the lure of technology companies such as Google, Facebook and Apple, whose casual working practices appeal to a generation for whom “entrepreneur” has become a buzzword.
If the 1987 film Wall Street, with its “greed is good” mantra, epitomised the 1980s culture of excess and consumption, this generation’s film is The Social Network, where young hoody-wearing Facebook founder Mark Zuckerberg enjoys almost overnight success.
“We can no longer compete on the glamour of banking or financial rewards alone,” says Michael Lavelle, head of European equity capital markets at Citi.
As a result, hiring has become more proactive. Banks are using social media, webinars and business competitions to attract students. Citi, for example, runs a trading game where students can win work experience.
Millennials also look for feedback, more responsibility and international experience. Senior bankers have had to become more involved in the recruitment process and in interacting with younger bankers.
“Work-life balance has come out as the top career goal for business graduates since the crisis,” says Margaret Doyle, a partner at Deloitte. Banks are not renowned for this.
While initiatives such as discouraging working at weekends, between 9pm on Fridays and 9am on Sunday mornings (Goldman Sachs), and a “protected weekend” off each month (JPMorgan) are good PR campaigns for banks, the reality is that they are hard to enforce.
“Working practices are ingrained in a staff – and client – culture that goes back decades,” says a vice president at a large US bank.
As well as pressure on working practices, banks have had to deal with the reputational fallout from the financial crisis and from mis-selling and benchmark-rigging scandals.
While financially savvy economics or business graduates shrug this off, it can deter graduates from other subjects.
Banks, however, say that competition for graduate places remains the same. They dispute suggestions that the quality of new recruits has decreased and that they are struggling to attract more diverse candidates.
Goldman Sachs typically receives 12,000 applications for 350 places on its European internship scheme. About two-thirds of these interns will go on to receive job offers.
Graduates lured to the perceived gold rush of the tech start-up may find the idea has been romanticised. “There’s not much that is glamorous about [it],” says tech entrepreneur Julie Meyer, chief executive of Ariadne Capital, which works with start-ups.
Successful companies such as Google and Facebook are known by venture capitalists as “unicorns” because the odds of creating one are so tiny.
The former Goldman Sachs employ said: “There is a massive rose tinted problem about entrepreneurialism. It’s dynamic and interesting but also chaotic and unstructured.”
Unpredictable pay and 100-hour working weeks are common in start-ups. Suddenly, banking does not look so bad after all.
Copyright The Financial Times Limited 2014