They’re getting closer. You can hear their steps, see their shadows, and feel their breaths. Slowly, these upstarts have been closing in on you. You wonder: How long can I hold them off?
Goldman Sachs knows that feeling all too well. For years, Evercore has been inching nearer-and-nearer to Goldman Sachs in the Vault Banking 50 ranking – the industry benchmark for banking reputation and quality of life in this rough-and-tumble industry. Would this be the year when Evercore finally arrived as the best North American investment bank to work for?
PRESTIGE IS THE CORNERSTONE OF THE RANKING
Well, Evercore will need to wait another year. In the 2019 Vault Banking 50 ranking released today (August 8th), Goldman Sachs retained the top spot for the third consecutive year – matching Blackstone’s 2014-2016 run in the Banking 50. It was hardly an easy run for the firm derided as “Government Sachs” and a “Great Vampire Squid.” Five years ago, .587 of a point separated the firm from Evercore in the ranking. Two years ago, that gap had shrunk to .201. Now, the firms are nearly even – 8.431 vs. 8.372 – easily the smallest margin since JP Morgan edged out Goldman Sachs by .07 of a point in the 2012 Banking 50 ranking.
What was the defining difference? To understand that, it helps to look at the methodology behind the Banking 50, which began in 2007. Developed by Vault, a leading collector of market intelligence for employer ratings and reviews, the Banking 50 starts with a survey to banking professionals in two key areas. First, bankers evaluate their peer firms on “prestige” – which measures perception and reputation as much as performance and personal experience. In addition, respondents score their own employers in 19 satisfaction-related categories, including pay, training, leadership, corporate culture, upward mobility, long-term outlook, and work-life balance. Every question is answered using a 10-point scale (with 10 being the highest score).
Overall, 2,800 professionals completed this year’s survey, up from 2,400 who participated in the 2018 ranking. To formulate a firm’s score, each response – or cluster of responses – receive a certain weight. Considering the value placed on stature and influence in banking, prestige is stressed the most in the Banking 50 formula, receiving a 40% weight. Firm culture accounted for 20% of the ranking, with compensation, business outlook, and overall satisfaction each pegged at 10%. Work-life balance and training (5% each) round out the formula – with 2019 weights remaining the same as those used in the 2018 ranking.
STRONG IN PRESTIGE – AVERAGE EVERYWHERE ELSE
Like previous years, prestige was the factor that separated Goldman Sachs from the pack. 150 years old, Goldman Sachs is draped in myth and steeped with authority. The brand conveys merit, wealth, and global reach – dealmakers par excellence, so to speak. The training ground for the 1%, Goldman Sachs alumni rolls boast stars who’ve gone on to serve as government leaders, chief economists, CEOs, and media mavens. They include expected names like Treasury Secretary Steve Mnuchin and CNBC’s Jim Cramer, along with unexpected additions such as Australian Prime Minister Malcolm Turnbull and CNN Host Erin Burnett. For many, Goldman puts the “gold” in gold standard – with a work hard-play hard ethos that draws many of the brightest and most ambitious talent. To hopefuls, it offers unmatched training and exposure, which serve as an exit ramp to the leadership roles in nearly any field.
Not surprisingly, Goldman Sachs notched an 8.898 score in prestige, nearly .75 of a point above runner-up Morgan Stanley in this category – and nearly 1.8 points above Evercore. Technically, Goldman Sachs’ prestige score represents a .06 of a point drop over the previous year. That said, it is also the firm’s second-highest score in this category over the past seven years – with the firm’s high water mark coming with the 2009 Banking 50 at 9.131 (a score it attained just weeks before the economic downturn). That’s an impressive score regardless of category, but one that’s inflated by the methodology’s 40% weight. Beyond prestige, Goldman Sachs often finds itself as an also-ran.
How far down is Goldman Sachs? In fairness, Goldman Sachs placed among the top 15 firms in 18 of 19 satisfaction categories. That said, the firm’s average placement was 10.3, a number buoyed by CSR (3rd), International Opportunities (6th), Benefits (8th), and Internal Mobility (9th). More notably, however, Goldman Sachs finished 13th in compensation, 15th in culture, and 14th in both leadership and long-term business outlook. Such numbers belie a workforce that feels underpaid, marginalized, and dubious of leadership and direction – an observation that is reinforced by a 12th place finish in overall satisfaction. Compare that to Evercore, which ranked among the Top 10 firms in 17 of 19 categories (5.84 average), or Centerview Partners, the Banking 50’s 3rd-ranked program which only ranked outside the Top 10 in one category (with a 5.15 average, no less).
WHY LEAVE THE OFFICE? GOLDMAN SACHS SUPPLIES EVERYTHING
This reflects an ongoing trend in the banking industry says Derek Loosvelt, senior finance editor at Vault, in a press release. “This year’s rankings again show that although Goldman is in a class by itself when it comes to prestige, boutiques like Evercore and Centerview continue to close the gap between the big firms and boutiques when it comes to being a top banking employer. Typically, the boutiques offer healthier work environments, with more forgiving cultures and much better hours.”
Does that mean the rankings are rigged towards Goldman Sachs, with the firm’s forte – prestige – receiving double the weight of the next highest category? Hardly, says Loosvelt in a statement to Poets&Quants. Instead, the Banking 50 weights mirror what bankers have told Vault about what is crucial to practitioners in the field.
“We base our ranking methodology on what insiders tell us are the most important factors when it comes to deciding which firm to join,” Loosvelt notes. “We don’t ask them why prestige is important, though. My opinion on why it’s so important for banking professionals is that prestige carries weight when it comes to getting into grad schools and getting other jobs at other firms (exit opportunities). Prestige typically translates into working on larger, more high-profile assignments, which can make for a better learning experience (if professionals are very involved in those deals) and thus help advance professionals’ careers.”
Still, Goldman Sachs possesses that allure – and delivers on it according to employees who completed Vault’s spring survey. The firm was described as “energetic,” “innovative,” “teamwork-minded,” and “client-centric” by staffers – a place filled with “supportive people who are smart and focused on career development” according to one member of the firm’s private equity practice in New York City. Other execs touted perks like on-site child care, gym, and even food – meaning most people stay in the office because they have everything they need on-site. In fact, one Seattle staffer even describes Goldman Sachs as “home.”
To see 5 pages worth of ranking and satisfaction data on the Vault Banking 50 ranking, go to page 4.