Big Banks Will Open Their Checkbooks To Lure Young Talent
NOEL KING, HOST:
A junior banker on Wall Street right out of college can earn well over $100,000. That is more than twice the median household income in this country. And this year, banks are willing to pay even more to lure talent. Here's NPR's David Gura.
DAVID GURA, BYLINE: As an undergrad at Stanford, Tashrima Hossain didn't think she'd spend her whole career in investment banking.
TASHRIMA HOSSAIN: I sort of initially saw it as me taking two years to save up a ton and then to do what I really cared about down the line.
GURA: Hossain had interned for nonprofits and had her sights on a job where she could make a difference. But she was convinced a six-figure salary right out of the gate would make it easier for her to pursue her dreams in a few years.
HOSSAIN: I do think it helped motivate my decision somewhat.
GURA: This is the Faustian bargain of finance. Pay is still one of the most persuasive parts of an investment bank's pitch. So Hossain, the president of her college class, took a job at JPMorgan.
HOSSAIN: I kind of thought of it as a means to an end, but when I started, I realized that it wasn't necessarily a means to an end that I wanted to pursue or that would be the best for some of the things I wanted to do.
GURA: Hossain was making money, but she wasn't making anything new and exciting like she could've been in tech. And what's worse, she was spending most of her time in mind-numbing number crunching, making and remaking spreadsheets and slide decks. Seven months in, she quit.
HOSSAIN: Like, even if I could have an increase in salary, I don't think that that was enough for me to stay. And largely, the reason I left and took a significant pay cut to leave was because I wanted to do work that mattered to me and felt fulfilling.
GURA: And for banks today, the stakes are even higher. The jobs market is competitive, and young people have so many choices. That's why the major firms, including Bank of America and Goldman Sachs, have raised starting salaries after a record-setting year. Drew Pascarella teaches at Cornell's business school, and he says Wall Street is in the middle of a talent war, and the weapon of choice is still compensation.
DREW PASCARELLA: I think the investment banks are watching each other, and they're also watching other, you know, highly competitive industries. And they want to make sure that they're - you know, that they're staying on par.
GURA: And Pascarella says they're willing to pay a graduating senior as much as 150,000 to $170,000, including a performance bonus, which is about five times the per capita income in the United States. According to Pascarella, a young banker often works two times a regular workweek.
PASCARELLA: The banks feel like they owe them a lot more money than is typical to pay a 22-year-old because they're simply getting a lot more out of them.
GURA: But the pandemic has caused some bankers to ask themselves if it's worth it. Anthony Keizner is a Wall Street recruiter, and he says as junior bankers have worked remotely, their family and friends have seen the grind firsthand, and they've said something.
ANTHONY KEIZNER: Well, you've been sitting there, looks like for 48 hours straight with your laptop on the sofa. Like, are they paying you enough to do this? And after a few months of this, people began to address that question by saying, well, maybe not.
GURA: Keizner says a signal moment was when a PowerPoint presentation became public from about a dozen young bankers at Goldman Sachs. They said they worked 98 hours a week on average and slept five hours a night. They claim their mental health and physical health declined. On a call with analysts, Goldman Sachs CEO David Solomon acknowledged how busy junior bankers have been and how remote work has made their lives harder.
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DAVID SOLOMON: To address this, we are taking concrete actions, including additional hiring, reallocating resources and pursuing stricter enforcement of boundaries.
GURA: Including one boundary prohibiting most work on Saturdays. Well, some banks have begun to discuss how to make work more interesting, which goes beyond pay, guaranteeing face-time with clients, for example. But bank executives acknowledge talented young people are leaving for other jobs in finance and for Silicon Valley, like Tashrima Hossain. After a brief stop in government, she's now working at Facebook on public policy.
David Gura, NPR News, New York.
(SOUNDBITE OF ROHNE'S "LIGHT FORMS") Transcript provided by NPR, Copyright NPR.