• Dipin Adhikari

Opinion: Goldman Sachs scandal - Rethinking work-life balance in finance?

It is well known that a career in finance, and especially investment banking, can be extremely gruelling in terms of the long hours worked and high-pressure environments. A recent survey from Goldman Sachs analysts from the investment banking division of the New York office has revealed the heinous side to this truth.


The survey reported an average of almost 100 hours worked per week in 2021, and perhaps even more shockingly, an average of 5 hours of sleep. This is possible in the US because there are no federal protections on maximum hours worked, and so employers like Goldman can stretch their employees to the limit, in full knowledge that the power of their brand and prestige will keep the pipeline of analysts churning. The same practices apply to the UK in spite of the EU Working Time Directive capping maximum hours at 48 per week. This is due to junior banker contracts including opt-out clauses for working week rules, instead mandating that employees work “whatever the business requires”.


“Whatever the business requires”

When taken to these extremes, this can have serious detrimental impacts on one’s physical health. There are numerous studies finding sleeping fewer than 6 hours per night to be associated with increased risk of diabetes, stroke, heart disease and poor immunity. A particularly striking 2018 study found that less than 4 hours per night resulted in severe declines in thinking ability equivalent to adding almost 8 years in age. It would not be unreasonable to assume that provided the average was 5, many employees would have been getting even less sleep and thus damaging their long-term cognitive ability, which ironically is crucial in many roles in the finance sector.

This is not even mentioning the severe harm to mental health, with employees reporting average scores for mental health (from 1-10, with 10 being healthiest) of 8.8 before starting their jobs, compared to 2.8 now. The extent of the toll of this deterioration was exposed when 22-year-old Goldman analyst Sarvshreshth Gupta took his own life in 2015, after complaining of 100 hour weeks and working throughout the night. This recent survey shows that not much has changed since then.


How will this affect perceptions of banking?


Whilst it was relatively accepted amongst smaller banking circles that this was the environment that many analysts faced, the publication of the survey and subsequent promotion on mainstream media has made waves and prompted important conversations. Many potential applicants, including myself, are now rethinking their decisions to pursue a career in or around investment banking as it is clear that health and work-life balance are severely compromised in the majority of these jobs.


Investment banking positions are very sought-after amongst student communities, especially for those studying economics and related fields. The main factor behind this is the compensation, with starting salaries being some of the highest paying graduate jobs even before bonuses, at around £50,000 per year. Despite this, when considering that the hours makes these roles equivalent to working 2 full-time jobs, analysts regularly working 18-hour shifts for 6 days a week will earn around £8.90 per hour unless they survive until bonus season. The base salary is comparable to the national minimum wage, which is £8.20 per hour for those aged 21 to 24. This structure is intentional and well-designed on the part of the banks, as getting to the end of the year to receive a bonus of between 40-80% of your base salary provides a very strong financial incentive to work hard when such a large portion of your pay is directly correlated to performance.


Why would people still want to work in an investment bank?


It is not all bad as an analyst however, especially in the long term. There is a lot of training offered by these firms and the opportunity to learn a lot of valuable skills and industry knowledge on the job. This provides very valuable career capital for those wanting to work in finance or related roles. The majority of junior bankers leave after two years as an analyst to go and join hedge funds, asset management, private equity, strategy consulting, and many other high-paying jobs with less stressful working conditions. Talking to peers firmly set on pursuing an investment banking graduate role, their view is that whilst the working conditions may not be great, the exit opportunities are, and so enduring two years of hell is seen as the price to pay for never having to worry about job security again.

I feel it is important to mention that this survey is specific to investment banking, one of the many divisions within a large multinational investment bank, and one of the most fast-paced. Working on live deals with large corporations worth billions of dollars demands the upmost urgency, and so it can be said that it is within the nature of the job. Those with an interest in finance and related careers can still work in other divisions should they want lower hours at the expense of smaller bonuses.


I didn’t come into this job expecting 9am-5pm’s, but I also didn’t expect consistent 9am-5am’s either” - New York based Goldman Sachs analyst

Another consideration is that these survey results were conducted at a time when all workers had been working remotely for the past year, resulting in the loss of the camaraderie that comes with working in an office environment. The relatively social environment of an office compared to the isolated position for most analysts working from home can be a big help towards alleviating some of the mental health concerns arising from such long hours.





Projections for the future


Personally, I am a strong believer that unless you are genuinely passionate about your work and you find it fulfilling, your work should not be your life. Consequently, upon hearing of the hours these young people were working, I found it absolutely abhorrent that you would spend some of the best years of your life doing little other than grunt work. To be clear, my main issue is not the work itself, but the time spent doing that work, and thus the lack of time remaining for anything else.


It is not as though Goldman Sachs has a lack of talent in their application pool considering they receive thousands of applications for each role, nor do they have a lack of funds to hire talent, especially considering they logged record revenues of $44.1bn for 2020. Whilst the CEO of Goldman did say they were “accelerating efforts to hire junior bankers”, the fact that this has not happened at an adequate scale between the first Goldman scandal in 2015 to now shows just how complacent the senior management have been on this issue.


"I've spoken to some analysts that have lost nearly 1 or 2 stone in one year just because they don't have time to cook." - London based Goldman Sachs Banker

The line must be drawn somewhere. If there are more tasks to be handled than there are reasonable hours for the current employees to complete them, then the logical solution is to hire more employees, not stretch the current employee hours to inhumane levels. As mentioned before, an analyst role in the investment banking division is usually seen as a stepping-stone towards other things. As such, the long hours worked are viewed as a badge of honour, demonstrating attributes of resilience, dedication, and conscientiousness to future employers. Perhaps employing more analysts will mean the value of the role in future employers’ eyes diminishes. If so, I would not want to work for an employer that thought it was a good thing that I was working 100 hour weeks anyway. It is possible to be resilient, dedicated, and conscientious without renouncing your health and personal relationships along the way.


I don’t think this will discourage those firmly set on a career in finance from pursuing roles at investment banks, but for those at the fringes and weighing up their options, the information from this survey could cause them to take their skills elsewhere. Having Goldman Sachs on your CV is still very powerful and can open a lot of doors in the future, and so if the situation remains the same – which from past experience it is likely to do so – expect students to be applying in the masses regardless of the sacrifices made.

The link to the survey can be found here