Working Conditions on Wall Street

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Welcome back.

Unfortunately, this is more of a raw piece. It’s hard to talk about something so delicate but the long hours culture of finance, particularly investment banking, feels like a regular discussion. It’s hard to have a nuanced conversation around this, but I’m going to try my best. I’m not a believer in “you can’t do anything”/”it will never change” philosophy. I am blessed to have a large audience and have several key decision-makers reading this content. I am writing this in part to communicate to the folks who can make decisions.

I know everyone is going to have different ideas and thoughts, but given the audience I have, it’s very important that I lay this all out.

A quick note before we get into it though.

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A lot of us have seen healthy 20-something-year-olds have serious health complications, and generally everyone in the industry knows of a situation where someone is getting carted out of the office by EMTs.

There’s an intensity in work hours that we all willingly sign up for. And it’s generally in exchange for a lot of money. But my callout to Staffers is this - does working someone to the bone make you feel good?

Investment Banking Analysts are generally working 80-100 weeks, stuck in their office and constantly grinding due to tight client demands and deadlines, and constant iteration and change that creates overwork. Client demands often squash downtime, which limited protection from “protected weekends”.

One question I had someone pose to me was “Would people accept lower pay for better hours”. When I asked Investment Bankers for ideas, a few of them noted that 80 hours is fine (for example), and it’s expected; it’s hours going over 80 that’s the big problem. No one is saying investment bankers need to have their hours reduced to 60 hours/week, it’s about trying to avoid the 100-hour workweeks that humans are fundamentally unable to sustain. People generally seem okay with lower comp for better hours.

Unfortunately, younger professionals don’t have much power to walk out the door and leave. I was broke when I started on Wall Street, and was still broke after my tiny first-year analyst bonus. It was very hard for me to figure out the next steps of my career and interview for new seats without being afraid that they’d let me go if they found out I was interviewing.

One of the bigger headwinds to ideas about reform is that if one person leaves, then how many capable people will be lined up to replace them? If students and analysts remain undeterred by the prospect of investment banking, even with all the warnings, then some of these efforts may be for naught. However, Silicon Valley and Tech firms has been stealing talented folks from Finance for almost two decades now, so it’s not like Wall Street has an iron grip on talent.

Before we get into solutions and ideas, let’s talk about ways you can focus on staying healthy in a high-powered finance job:

No one is invincible. The human body fundamentally starts breaking down after long periods of work and limited time to sleep. You need to take care of yourself and be thoughtful about what you put in your body.

Unfortunately, your time outside of the office may be limited. You must take advantage of every single day that is calmer to catch up on sleep or exercise. Find a routine to go the gym, especially your office’s gym: Even if it’s just exercising 2-3 times a week, try to find time for a quick run on the treadmill or some lifting. You may not be able to get an hour plus in the gym, but you need to find room for some quick stints that you can hopefully extend out when you have some free time. While your early 20s is when you can arguably eat almost any food you want and feel fine, that ship definitely sails and you start feeling the damage of unhealthy food before you turn 30. The sooner you can shift towards healthy food that still energizes you, the better. Make sure you hydrate, cut out the junk food, take some time to walk/move around, use blue-light glasses if you wear glasses, find the right supplement routine, and try to have consistent sleeping schedules.

You must go the gym and make yourself do it. There are a lot of Associates/VPs who are okay with making sure Analysts get time to step off the desk and stay healthy. I was told by one banker that “The days you go (to the gym) when you don’t want to or don’t feel like it are the days that matter the most” and “a bad lift is better than no lift”.

Avoid/Don’t overuse vices: You have to take care of yourself. Honestly, the sooner you get away from the stuff you know is bad for you, the better. I have to blame the Wolf of Wall Street for glamorizing this type of behavior.

Excessive amounts of coffee, unhealthy energy drinks, Adderall, Nicotine, and Coke are among the vices that folks feel like they have to gravitate to in order to stay awake and get the work done.  

The older I’ve gotten, the more I’ve avoided and reduced vices, but it’s hard for folks to get off their highs. It’s a chicken and egg problem where the high-stress and long hours environment forces folks into unhealthy habits.

So let’s get into solutions and ideas.

Solutions/Ideas:

1) More Staffing/Increase Headcount

Adding more junior and mid-level professionals to coordinate and complete the work can reduce hours significantly. This feels like a no brainer and not that expensive.

2) More globalized staffing

Outsourcing work abroad and leveraging a global team is an idea. A “Follow-the-sun” model where U.S. Analysts hand off work to international teams can reduce the number of all-nighters. India is a key offshore team for a lot of banks. However, bankers have noted to me that they feel like the teams they work with abroad aren’t up to par. I have a hard time believing there isn’t talent globally, I generally have found teams abroad to be very technically sound, but lacking as it relates to soft skills and writing. But overall, these teams are full of smart, hardworking people who don’t need a cocky American to downplay what they can do. So I believe globalized staffing can be a solution if the right measures are taken to build out these functions.

3) Focusing on more impactful work, better timelines, and less “sitting on your hands”

The reduction in “sitting on your hands” would have to come from more senior members reviewing materials and guiding juniors sooner. This also could mean a shift away from facetime culture and not having people sit at their desks for the sake of it.

Some of the follower-related feedback I got had to do with removing false deadlines and focusing on more impactful work. Having staffers and an MD who can give reasonable timelines as opposed to pushing things can give analysts time to catch their breath and less pressure. Completing something 24-72 hours before its actually needed is a common complaint.

Staffers directing analysts and associates to focus on more impactful work, as opposed to spinning wheels is crucial. It’s a common complaint among investment bankers I talk to that a lot of the work is meaningless.

4) Don’t go into Banking/Quit

If we truly can’t solve anything, or you’re stuck in a very ugly situation, then going down a different career path is the move. Other paths include private credit, credit, asset management, equities, consulting, corporate finance, or working at tech companies

This feels like an almost impossible decision for folks. But if you’re in investment banking, it’s not by accident. It means you’re a very smart individual and your contributions will be highly valued in another role.

5) A culture change among SVPs, Directors, and MDs.

This starts at an individual level and is part of why I’m pleading to the professionals who read my newsletters.

One follower noted to me that MDs need to stop taking pride in lean teams. Someone pointed out to me that there are boutiques where there’s a culture of caring, so there’s certainly a lot of firms and groups that treat their people respectfully.

6) Align MD compensation to how they’re treating their staff, shame bad leaders, and have some sort of reporting mechanism in place.

This one is a hot take. Things can go down a slippery slope when you align compensation with something that could be semi-subjective, but if any firm is serious about improving working conditions, then they’ll have some sort of checks & balances in place, and have some way to ding Staffers who treat employees poorly.  

Maybe this means Anonymous peer reporting as well.

7) Leverage AI

We’re getting closer to AGI, with a lot of AI focused companies dramatically increasing their capabilities. I expect this technology will advance rapidly and there will be significant time savings as it relates to modeling and putting together slides. If AI can solve the repetitive work, then this will be massive for productivity gains. However, the counter-argument is “now that I can do more with AI, I need fewer people, or I can get more out of you in a given day.”

8) Control client expectations

I think unfortunately this is unlikely to happen. Investment Banking and Private Equity processes are inherently competitive in nature, and it’s hard to have a tiger change its stripes. But maybe the removal of false deadlines and a better level setting of when bids or pitches are due can give an extra cushion of time that doesn’t drain the team working on the deal.

9) Improvement in protected time off

Actually enforcing protected time off/weekends can help with burnout, so long as this doesn’t result in someone else then being burdened with a significant workload.

10) Unionization/Some sort of Coalition

This idea was floated last summer. It’s not inherently impossible, but it might be very challenging. Other industries have unions, such as minor league baseball players, and some doctors/residents. I ultimately think banking is far too competitive and fragmented to have this type of arrangement, but it’s an idea that’s been floated.

At a minimum, having “unity within the ranks” so you can push back and support each other is really important. The “GS 13” wasn’t that long ago.

I’m here to help:

You can anonymously reach me at any time. Obviously, I need to verify any claims and submissions, but I’m here for you. The core thesis of the Wall Street Gossip page is meant to repost anonymous submissions from wall street professionals and cover the latest finance news.  

In terms of doing deep and thorough investigation that names individual parties, I believe that’s better suited for reporters who are working their butts off to improve wall street working conditions.  

Ultimately though, I put this piece together because I don’t want to sit around and do nothing or let discussions about improving working conditions in finance teeter out after 24-48 hours. There’s a problem, some firms have started taking measures over the past 9 months, but it starts from within, and it starts with a lot of the people reading this. Actions you take at the individual level can help drive positive change within our industry.

My best wishes,

Harry

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