Investment banking? Who’d want to do that?
It’s a common refrain in Millennial circles. Once the destination for brainy and hungry MBAs, finance has lost some luster, particularly with a generation that yearns to make a lasting difference over a quick buck. Just look at Columbia Business School, a 40 minute subway ride from Wall Street. A decade ago, CBS placed 56% of its class in finance. Last year, the number was 37%. The trend is similar at Wharton, where the percentage dropped from 47.7% to 38.4% after the 2008 economic meltdown.
Finance was never an easy sell. It requires a steep learning curve, punctuated by an Autobahn pace and back-breaking workloads. You learn stamina from tinkering with models at 2 a.m. And you gain an appreciation for detail, knowing any misstep can scuttle a billion dollar IPO. Sure, bankers are richly compensated. In the end, pay isn’t the end all. Bankers are also seeking training and experience to prepare them for bigger roles. They value a supportive culture where they have a voice in decisions. Of course, who doesn’t want the flexibility to enjoy the occasional dinner with family? When you look at the total package, Goldman Sachs remains the firm to beat, retaining the top spot in the Vault Banking 50 for the second year in a row.
GOLDMAN SACHS REMAINS THE MECCA OF BANKING
The Goldman Sachs name still possesses a certain majesty. Founded in 1869, the firm’s alumni roll is a who’s-who of commerce, including Treasury Secretary Steve Mnuchin, Chicago Mayor Rahm Emanuel, CNN Host Erin Burnett, and Australian Prime Minister Malcolm Turnbull. They land the big deals and reap the big fees. And they possess the widest networks and deepest expertise too. Such advantages enable them to be very picky about who they hire. Last year, Fortune reported that Goldman Sachs hired just 3% of the313,000 applications it received in 2015. What’s more, over 30,500 MBA students and graduates applied for internships and associate positions with the firm in 2016, a 15% uptick over the previous year according to CNBC.
“There’s still no better name in banking than Goldman Sachs,” writes Derek Loosvelt, Vault Senior Financer Editor, in a press release. “Goldman provides professionals with excellent deal experience, the chance to work with the top bankers on Wall Street, and several great workplace benefits. It has protected-weekend-day policies for junior bankers, no-working-past-midnight polices for interns, fast-track promotions, and a modern performance review system. Our survey takers tell us that there’s not a better banking brand to have on your resume than Goldman’s.”
It also boasts a high quality of life. To understand why Goldman Sachs remains a haven for banking royalty, it helps to understand the Banking 50. Formulated by Vault, a leading collector of market intelligence for employer ratings and reviews, the Banking 50 surveys North American bankers on a wide range of subjects, including prestige, pay and benefits, corporate culture, leadership and outlook, training, and diversity. This spring’s survey was answered by over 2,400 banking professionals at all levels of their firms. Using a scale of 1 to 10 (with 10 being the highest score), respondents rated their firms in over 20 workplace categories. They also scored the prestige levels of their competitors. In the ranking formula, prestige received the greatest weight at 40%. Culture consumed another 20% of the weight, followed by compensation (10%), business outlook (10%), overall satisfaction (10%), work-life balance (5%), and training (5%). The 2018 attributes and weights remained the same as 2017.
DESPITE IMPROVEMENTS, GOLDMAN SACHS BAILED OUT BY ITS BRAND PRESTIGE
As expected, Goldman Sachs’ differentiator was prestige. It scored an 8.960 (out of 10) from competitors. That was nearly a point higher than its nearest rivals, Morgan Stanley and JP Morgan. It also managed to improve its score by nearly .1 of a point. Without prestige, Goldman Sachs would’ve been an also-ran in the Vault Banking 50.
Despite ranking 1st, the Banking 50 was a mixed bag for Goldman Sachs. On the plus side, it finished in the Top 15 in 22 of 23 workplace categories, missing out in just Vacation. That said, it reached in the Top 5 in just five categories, including CSR (corporate social responsibility) and all four diversity categories (overall, women, minorities, and LGBT). It also notched worse survey averages in 20 of the 22 workplace categories where it ranked.
On one hand, Goldman Sachs employees are more bullish on the future, with the firm’s business outlook score rising from an anemic 7.364 to 8.065, good for 15th in the category. That said, the firm’s performance slipped mightily in international mobility (-.38), promotion policies (-.363), benefits (-.219), and internal mobility (-.204). Employee satisfaction fell by .138 of a point as well.
DO VAULT RESULTS REFLECT A DISTRACTED LEADERSHIP TEAM?
This was a marked departure from the previous year, when Goldman Sachs experienced score improvements in every category but one. Is this a harbinger that Goldman Sachs is poised for a fall in the coming year? There is certainly some unease among the ranks. One 2017 survey respondent cited “harsh” hours as a downside to the firm, with another listing “big egos.” While one private wealth advisor touts perks like 16-week maternity leave, the respondent doesn’t sugarcoat the realities: “High pressure and expectations to build a book of business. A lot of turnover in the role for new advisors. Very competitive environment. One of the few post-MBA roles that expects cold-calling.”
From the outside, Goldman Sachs remains the gold standard, the yardstick against which the industry is measured. If these surveys reveal anything, it may be that firm leadership has taken its eyes off day-to-day conditions and individual attention in favor of fostering greater inclusiveness and improved global citizenship. Considering the strides made by Goldman Sachs across the board in recent years, the 2018 results may also be an anomaly. “The firm is extremely focused on improving work/life balance,” writes another respondent. “In the time that I’ve been here, I’ve seen a tremendous difference, not only as a result of formal policies but also in the culture and mindset of those who work here.”
Still, Goldman Sachs is only for the select few — and that’s by design. “The firm expects nothing less than a 100% hard work, so the firm is not suited for someone who wants to have a relaxed, less stressful work condition,” adds another banker on the firm’s tech side. “But if you are you up for the task, the firm is great in providing a place to maximize your potential and talent.”
Go to next page to see the overall Vault Banking 50 ranking.