The generational culture war tearing investment banking apart

Banking has never been an industry for the faint-hearted. Working 120-hour weeks over at least six days is common. But for members of Generation Z, infamously protective of their wellbeing and mental health, the brutal conditions ingrained in the job are proving to be a big turn-off.

The long days and persistent pay-your-dues mentality from top brass, who want new recruits put through the same rite of passage they barely survived, have created a culture war between Gen Z bankers and their bosses. Younger staff in the UK are pushing back against their managers over hours and conditions, attempting to turn the hierarchical system on its head.

Industry follows the lives of a group of young investment bankers.Credit: Amanda Searle/BBC

The money remains good, with average pre-bonus pay of £60,000 ($116,000) for graduates walking into a job from university. This is especially appealing when the rest of your 21-year-old peers are scrimping for dehumidifiers in mouldy house shares. But with earning potential now the same at tech and venture capital firms – which also offer the hybrid work perks and kombucha culture favoured among the UK’s youngest working generation – banks are fighting to keep up.

A recent bout of bad PR isn’t helping. The Wall Street Journal found that junior bankers at many firms are instructed by their bosses to ignore rules that limit working hours by not logging them. Rules to give employees at least one day off a week are often sidestepped. In May, a Bank of America worker died aged 35 from natural causes, shortly after looking for a new position with fewer hours, while reportedly clocking in 100 hours a week. This month, JP Morgan implemented 80-hour caps on working weeks for junior bankers.

‘It’s a get-in, get-out situation’

“I definitely had a couple of times where I had to go to the bathroom and just cry for a bit,” recalls Lamide Elizabeth, 26, who joined JP Morgan as an intern during the pandemic. Part of the pressure comes from the 12-hour office days and “very, very tight deadlines”, she says. But there’s “an internalised pressure as well, just because you’re also around so many high achievers that you feel like you have to perform”.

She describes the ethos of investment banking as a battle of wills: “Are you strong enough to join the elite group of people? Can you keep up with the best of the best? ... They are able to withstand it, and if you can’t withstand it, then you’re probably just not good enough.”

Last year, first-year analysts at the top end of the pay scale earned an average £85,000 in London, according to Pearse Partners, a recruitment firm. They also pocketed a 60 per cent bonus, bringing their total take-home pay to £136,000. (Ordering dinner and cabs home are also the norm.) You’d expect, with that amount of cash coming in, that young people would be living it up as in Industry, the hit BBC show that makes the lives of young bankers seem incredibly flash (and unbearably grim).

But for many, “it’s a ‘get in, get out’ type of situation,” says Meagan Loyst, 27, who nearly ended up as an analyst before switching to venture capital instead. She left university five years ago, and says that all her friends in banking have already quit; unsurprising, maybe, given a 2021 survey from first-year analysts at Goldman Sachs, who described “inhumane” conditions, 100-hour work weeks and persistent “abuse” (“I’ve been through foster care and this is arguably worse,” wrote one anonymous contributor).

Elizabeth adds: “If your goal would be to have a good work-life balance and go out, and go on holidays and enjoy your holidays, I don’t think you’d get the result you were working for.” She had a more specific short-term goal, though: to buy property. By the time she quit the industry earlier this year, she had bought a house in cash, along with a luxury flat in Johannesburg, almost a decade before the average UK buyer completes on their first home.

A 2021 survey from first-year analysts at Goldman Sachs described “inhumane” conditions.Credit: Reuters

Jean Kallenburg, a 22-year-old investment banker, says: “Most of my friends claim that your 20s are the best stage in your life and that going out on weekends and travelling should be enjoyed to the max, rather than wasting these precious years of youth in an office environment, especially 80-plus hours per week.”

Her mindset – and likely her £146,000 first-year earnings – are somewhat different. “I’d rather grind in my 20s and enjoy my 30s.”

Of her work peers, Kallenburg says: “They are definitely different from prior generations of bankers, but they’re also very different from most of the Gen Z demographic more broadly, at least in my experience. Investment banking specifically is a challenging path, and it can be tough to maintain a robust social life and prioritise mental health,” things that remain highly important to younger employees.

‘A clear generational gap’

There is a big divide between the youngest bankers and their higher-ups. Wais Achikzad, a former vice president at JP Morgan who now leads New Era Training, a leadership and coaching firm, says the old guard are struggling to get on board with Gen Z’s mores.

“There are expectations from VPs and above that ‘they [younger workers] have to go through what we went through’,” he says. But managers don’t want to make the effort to communicate with Gen Z, or accommodate their expectations, he adds. Senior bankers “just want them to come in, do the job and go home, just like we used to”. What they don’t realise is that “it doesn’t work that way any more”, Achikzad says of this “clear generational gap”.

He left the industry last year after more than two decades. By that stage, there were extreme generational divides between his peers, the old guard, and younger people within the office.

“With the gap widening, Gen Z was less and less responsive, [and we saw a] higher turnover, more mental health issues … They also want to be valued as human beings, and unfortunately, in Wall Street and the finance world, you’re a number.”

The industry itself hasn’t changed, he says, even if expectations have. Then as now, “you have to have a lot of strength mentally to survive”.

Banks can’t recruit the best and the brightest

Money is no longer enough to keep workers put off by working conditions, says Nishma Gosrani, who leads financial services at consultancy Bain & Company. That – plus the competition from tech firms for the brightest recruits – is radically altering who enters the industry in the first place. There are “very different sets of students applying, much more second tier, for these large banks, and the very best of the industry is now in tech,” she says.

In the first two decades of her career, “you couldn’t get a spot on an intern program at any of the top five investment banking institutions”; today, “the dynamic is very different”.

The top investment banks “would be the first to put their hands up and say they’re not able to attract the calibre of talent, perhaps, that they were 15, 20 years ago”, she says. While lecture theatres at prestigious universities would once have been packed to the rafters to hear big industry names speak, that too has ebbed away, she adds.

The industry’s dwindling appeal has not been helped by COVID, and the subsequent calls from banks for staff to return to the office five days a week.

Nor has the fact that purpose, sustainability and the environment (which are expertly skewered in Industry’s upcoming season) are key drivers for Gen Z, who are less likely to compromise than their forebears. “They’re less tolerant, but there is also much more open to them,” she says. And as a result, “employers are having to work much harder to convince these individuals, or the best talent, to join the industry”.

Gen Z will continue to hold power over these employers until these banks find a better way to placate their young charges, or juicier carrots to dangle. For now, Gen Z workers like Loyst, and the many others mulling what is at best a lucrative stepping stone rather than a career commitment, “banking is not the endgame”.

The Telegraph, London

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