After the 2013 death of a Bank of America intern from an epileptic seizure that was possibly triggered by fatigue from working too many hours, many top banks enacted safeguards and launched programs to make sure their young staffers get needed rest. Among the measures many of the big banks put in place: intense monitoring and forced time off. But Patrick Curtis thinks they could do more.
Curtis is the founder and CEO of job search and news site Wall Street Oasis, where the death of Bank of America intern Moritz Erhardt was first revealed. Now, in the wake of the July death of a junior banker at mid-market Chicago boutique Lincoln International, Curtis is calling for action. “The bulge brackets have taken it upon themselves act on this, so let’s take a look at the smaller firms and help them to work smarter rather than longer,” Curtis says.
Employees at 39 firms in the WSO database report working an average of 80 hours per week or more. It definitely happens more at smaller firms, but not always: Among the bigger banks where the weekly hours are longest: Moelis & Company, 82.6 hours; Lazard, 81.8; and Evercore, 81.1. Wells Fargo lands toward the middle of the pack, at 74.4 hours per week on average, while Goldman Sachs is at 72.4. BoA Merrill Lynch employees average 71.3 hours per week, while those at Lincoln International, where the summer analyst died in July, average 75.4.
“What’s interesting is, Lincoln isn’t even near the top of (the list of) some of these boutique and middle-market banks that just really grind their analysts down,” Curtis says. “I think there’s a story there that people aren’t really talking about: All these bulge brackets have put in these measures to try and reduce excessive hours for the interns and analysts — to force time off. But where are those programs for these boutiques and these middle markets, these places that make up the majority of where the analysts and associates are?”
GOLDMAN SACHS LEADS IN MANY METRICS GAUGED BY WSO
WSO releases annual reports based on a trove of user-submitted data from its online community of half a million. One of the things they measure is hours worked. The longer the hours, the bigger the dent in banks’ performance on perhaps the most important question measured by WSO: overall employee satisfaction, or “happiness quotient.” Few of the banks where employees work the longest can be found in the upper tier of “happy places” — instead, that’s where many of the biggest banks reign. Leading the way: Goldman Sachs at 99.4%, followed by Bank of America Merrill Lynch, JPMorgan Chase, Evercore, and Credit Suisse. Wells Fargo, No. 2 when P&Q last reported on WSO data, slipped to ninth place at 95.0% satisfaction. Lincoln International was 13th, at 92.7%. Goldman was also tops in professional growth opportunities, followed by Lazard, JPMorgan, Credit Suisse, and Jefferies & Co. In career advancement, Goldman slipped to third behind JPMorgan and Lazard and ahead of Evercore and Moelis & Co.
Goldman can be found at or near the top on many of the other questions, too, especially the all-important question of best pay, which asks respondents to rate their compensation compared to those with similar jobs elsewhere. The top company is Evercore, the New York-based investment bank advisory firm, followed by Goldman, Citigroup, Moelis, and BoA Merrill Lynch. (See page 3 for charts on pay by position, from interns up to directors, at the bulge brackets, mid-tier, and boutique banks.)
Clearly, in many ways, Goldman Sachs is the gold standard in investment banking. It’s first in teamwork, first in leadership, first in competence, first in “recommended,” first in proudest employees, and fourth in communication. One place where Goldman does not rule the roost, so to speak, is in the interview process. The hardest interview? Evercore. The best interview experience? Stephens Inc., the independent financial services firm based in Little Rock, Arkansas. On the former measure, Goldman ranks 11th, and on the latter, 28th.
Think you’ve got a job at Goldman just because you scored an internship there? Think again. Goldman ranked only 39th in intern hiring rate, at 67.7%. Two firms, TD Securities and Standard Chartered Bank, led all companies at 100%, followed by Lincoln International (95%) and three at 90%: Perella Weinberg Partners, FMI Corporation, and Keefe Bruyette & Woods Inc.
BAYESIAN METHODOLOGY, EXPLAINED
Wall Street Oasis’ graphs and tables use data from the year to date and the prior two years. That means the rankings are constantly changing based on additional data collected every day.
Whenever we publish data from WSO, we explain their somewhat unusual methodology. WSO compiles data (from more than 50,000 total submissions and counting) and ranks banks by percentile using Bayesian probability. That means, with a few exceptions (such as actual compensation figures and percentage of interns who are hired to full-time positions), each chart shows the same series of percentages in descending order. For example, Evercore ranked third in Overall Employee Satisfaction at 97.2%, while Morgan Stanley ranked third in Professional Growth Opportunities at an identical 97.2%. How is this possible? As Curtis explains, percentiles simply show where a company ranks out of a certain number of companies — in this case, 109. “When we ask an employee a certain question, banks get different scores based on these responses — but that doesn’t change the total number of banks involved in the dataset.”
In the example above, where Evercore and Morgan Stanley both landed at No. 3 on separate metrics but got equal scores, “the reason the percentiles are exactly the same is because for that specific metric, they were both ranked No. 3″ out of 109 total firms. In this case the percentile formula is (109 – 3)/109. Another way to look at it: The average score of metric 1, overall employee satisfaction, is 3.6 stars. If a company gets one 5-star review on that metric, Curtis says, “we don’t want to rank that ahead of a company with 10 reviews and an average ranking of 4.9 stars.”
Why do it this way? “The Bayesian stuff,” he says, “is just a way to deal with companies where there are only a few observations. So, what Bayesian stats allows you to do is pull the companies with less reviews closer to the average of the entire group, so that as more votes come in they are pulled more toward their actual average and away from group average. (This gives you) higher confidence that the score is a true reflection versus just one or two votes (and) prevents companies with only a few great or bad reviews from ranking above or below companies with many great or bad reviews.”
COMMON-SENSE SOLUTIONS TO THE PROBLEM OF OVERWORK
Patrick Curtis wants to do something about the tendency of young, eager interns and first- or second-year employees to overwork themselves or allow themselves to be overworked. The dangers are greatest, he says, at the smaller firms where safeguards haven’t been adopted, support is harder to get, and the pressure to perform is in many ways greater.
“The staffs at these boutiques and mid-markets can be even more lean — there’s only a few analysts and maybe five partners,” Curtis says. “So all of a sudden these analysts are working 100 hours a week back-to-back-to-back-to-back. There’s a danger there. And it goes under-reported.
“We’ve been talking about whether we can do something to help these kids, because we have a little bit of sway, in terms of trying to get some common sense solutions in the industry. Since the bulge brackets kind of took it upon themselves for PR purposes, maybe we can have a standard for all the other firms that haven’t announced or signed anything. We need them to work smarter, they can’t work their kids a ’40-hour day.’ What if they actually had more interns or brought on an extra analysts instead of grinding their kids down?
“So maybe there is some sort of protection pact that we can put together — not even asking banks to put a cap on the number of hours they can work, but something where anyone normal looking at it would say, ‘How could they not meet these?’ So maybe a 24-hour max workday: After somebody has been in the office for 24 hours, there should be an eight-hour period where maybe they are forced to leave the office. Something like a max average 80-hour work week, so if somebody does put in a 100-hour week, within a rolling period they need to put in a 60-hour week to bring the average down.
“Enforcement is the tough part, right? There needs to be some sort of third party in the center, reporting violations and making it known. I don’t know if that’s through the media or through Wall Street Oasis or whatnot, but it’s an idea.”
(See pages 2, 3, and 4 for charts on overall satisfaction, intern hiring rates, compensation, advancement opportunities, and more.)