When Vince Iyoriobhe joined Bank of America\u2019s investment banking division as a rookie analyst in 2017, he planned to stick around just long enough to get the experience needed to pursue his dream career in another corner of finance entirely \u2014 private equity.<\/p>\n
\u201cI knew banking was going to be tough,\u201d Mr. Iyoriobhe, 26, said. But his attitude was: \u201cI\u2019m going to do it for two years and then go on to something else.\u201d<\/p>\n
The lure of investment banking is fading for the youngest members of the work force.<\/p>\n
For decades, investment banking \u2014 the job of advising big companies on their most pressing needs \u2014 was one of Wall Street\u2019s most prestigious careers, glorified in 1980s best sellers by writers like Tom Wolfe and Michael Lewis. Thousands of young hopefuls applied every year for a chance to start careers at Goldman Sachs, JPMorgan, Salomon Brothers and other banks as analysts \u2014 entry-level positions that taught aspiring financiers how to build financial models and evaluate businesses.<\/p>\n
They embraced the long hours and grunt work in exchange for the prestige of jobs that eventually paid millions. In turn, each analyst class provided banks with a reliable pipeline of talent.<\/p>\n
But new college graduates are increasingly unwilling to put themselves through the strenuous two-year analyst program, despite starting pay that can reach $160,000. That\u2019s especially so as careers in technology and other parts of the finance world promise better hours and more flexibility. The pandemic, which forced many to reassess their work-life balance, has only underscored that thinking. Others, like Mr. Iyoriobhe \u2014 who put in 90-hour weeks at Bank of America, sometimes going home only to shower \u2014 are willing to do it for the minimum time necessary to put it on their r\u00e9sum\u00e9s. He now works at a private equity firm.<\/p>\n
\u201cIt\u2019s kind of like going through boot camp,\u201d said Ben Chon, a 27-year-old entrepreneur whose YouTube video about leaving his job as a health care banker in JPMorgan Chase\u2019s San Francisco office, posted in February, has garnered more than 100,000 views.<\/p>\n
Mr. Chon said he appreciated all that he had learned as an analyst, but added: \u201cYou don\u2019t have control of your lifestyle, and you\u2019re working even when you don\u2019t want to.\u201d<\/p>\n
The number of applicants to banking analyst programs is hard to track, but business school data, which captures a slightly older cohort of potential financiers, shows a broad decline in interest in investment banking. Last year, the five top-ranked U.S. business schools sent, on average, 7 percent of graduates from their master\u2019s of business administration programs into full-time investment banking roles, down from 9 percent in 2016. The decline was pronounced at the University of Pennsylvania\u2019s Wharton School, where bankers were 12 percent of the M.B.A. cohort in 2020, compared with more than a fifth of the class a decade earlier. Harvard sent just 3 percent of its 2020 class.<\/p>\n
In a recent Instagram survey on the page \u201cMillennial Career Polls,\u201d conducted by a former investment banker who wants to start a platform to help young professionals navigate their careers, 79 percent of the 139 respondents said they thought banking would be a less desired career in the future than when they had joined it. And in February, 13 analysts at Goldman showed their superiors a PowerPoint presentation describing brutally long hours and their declining health.<\/p>\n
\u201cThe sleep deprivation, the treatment by senior bankers, the mental and physical stress \u2026 I\u2019ve been through foster care and this is arguably worse,\u201d one of the unnamed analysts surveyed in the presentation said.<\/p>\n
\u201cThe industry is not as attractive\u201d as it once was, said Rob Dicks, a consultant at Accenture who specializes in recruiting in financial services. \u201cEmployees want a hybrid model, and the banks are saying no,\u201d he said, referring to a combination of in-person and remote work. \u201cThe message is: \u2018The bank knows best, we have a model for doing this, and you will conform to that model.\u2019\u201d<\/p>\n
Although top executives of the biggest banks have recently talked tough about the need for employees to return to the office, many are paying heed to the complaints of their youngest workers. Goldman\u2019s chief executive, David Solomon, said in an earnings call this month that his firm would pay more competitively and enhance rewards for performance. Goldman is also enforcing its no-work-on-Saturday rule. JPMorgan is rolling out technology to automate some aspects of analysts\u2019 work, and recently hired more than 200 additional junior bankers to ease the pressure in a particularly busy year.<\/p>\n
A first-year investment banking analyst in New York can make as much as $160,000 in a year, including a bonus, according to estimates from Wall Street Prep, a company that helps aspiring bankers train for the industry. But several firms, including Citigroup, Bank of America, JPMorgan and Barclays, have raised the salaries of junior bankers. Credit Suisse paid what it described internally as \u201clifestyle bonuses\u201d of $20,000 to younger bankers.<\/p>\n
Jefferies, another investment bank, even offered Peloton bikes, Apple Watches and other perquisites to thank more than 1,100 of its analysts and associates \u2014 the next rank up \u2014 for working hard during the pandemic. Jefferies employees \u201chave gotten us through the hardest period we have experienced in our careers,\u201d Rich Handler, the bank\u2019s chief executive, and Brian Friedman, its president, wrote in a July 1 letter to staff and clients.<\/p>\n
Still, banks tend to hew to a work culture fetishized in the 1980s, when Mr. Wolfe\u2019s \u201cThe Bonfire of the Vanities\u201d memorialized Wall Street as the home of \u201cmasters of the universe.\u201d Young analysts worked around the clock, picked up coffee and food orders for the team, endured mindless tasks like filing trade tickets, and were subjected to pranks and verbal abuse. In exchange, they gained a foothold in one of the most lucrative careers available, when new products like bonds backed by mortgages and corporate mergers and acquisitions were creating vast profits.<\/p>\n
Some of today\u2019s heaviest hitters in banking got their start in that heyday, including John Waldron, the president of Goldman Sachs; Sharon Yeshaya, Morgan Stanley\u2019s new chief financial officer; and Carlos Hernandez, executive chair of investment and corporate banking at JPMorgan.<\/p>\n
Banks lost much of their allure after the 2008 financial crisis, just as Silicon Valley was taking off, and private equity firms morphed from small partnerships to asset management behemoths. The newer career options promised potentially quicker and bigger payouts, better hours, lofty corporate missions and perks like taking pets to the office. To young graduates, banking analyst roles appeared too grinding to be worth the effort, at least over the long term.<\/p>\n
In recent years, recruiters for giant private equity firms like Carlyle and Blackstone, which manage billions of dollars for clients and also buy up companies, began wooing analysts even before they started their jobs. <\/p>\n
Brian Moynihan, the chief executive of Bank of America, said that wasn\u2019t necessarily a bad thing. \u201cThey\u2019re very talented kids, especially around the investment banking arena,\u201d he told Bloomberg TV this month. \u201cAnd there\u2019s a lot of offers from private equity and other things that we\u2019re training them for our clients, and that\u2019s OK, too.\u201d<\/p>\n
And there\u2019s the pull of Silicon Valley.<\/p>\n
\u201cThe technology sector has just completely changed the game,\u201d said Jamie Lee, 37, who worked in banking before starting a venture-capital firm this year. \u201cThe opportunity cost is simply too high to be sticking around in a job where you\u2019re not getting the treatment that you want.\u201d<\/p>\n
Mr. Lee\u2019s father, the JPMorgan banker Jimmy Lee, was for decades one of the best-known players in his field, advising companies like Facebook and General Motors before he died in 2015. But when the younger Mr. Lee was finishing college in the mid-2000s, his father urged him to avoid the analyst programs.<\/p>\n
\u201cHe said, \u2018Honestly, J, the way that I\u2019ve seen that we work these kids, I\u2019m not sure that I want that for you,\u2019\u201d Mr. Lee recalled.<\/p>\n
More compensation may not be enough for lots of young workers, for whom the pandemic only highlighted the less palatable aspects of investment banking \u2014 even as other careers dangled more appealing work-from-home policies.<\/p>\n
Armen Panossian, a rising junior at Rutgers University, is interning in the logistics division of the energy company BP and hoping to land a similar full-time role after college. He said the pandemic was part of his motivation for pursuing a more 9-to-5 job rooted in finance.<\/p>\n
\u201cI think a lot of people rediscovered the importance of mental health,\u201d Mr. Panossian, 21, said.<\/p>\n
Eden Luvishis, a 20-year-old student of finance, computer science and math at the Stevens Institute of Technology in Hoboken, N.J., wants to work in fintech but would consider becoming an engineer at a major bank \u2014 a career that could marry her interest in finance with a more predictable way of working.<\/p>\n
\u201cI was never so interested in traditional banking jobs,\u201d she said. \u201cFor me it was always more of the quant side,\u201d meaning roles involving quantitative analysis. \u201cI really love math.\u201d<\/p>\n
Before graduating from Mount Holyoke College in 2016, Areeba Kamal worked for a summer as a trading intern handling complex bond products at Bank of America\u2019s Midtown Manhattan tower. She arrived around 8:30 a.m. and often stayed until 10:30 p.m., trying to learn the intricacies of her product. She sent money to her family in Pakistan.<\/p>\n
\u201cIf you\u2019re an international student, early on you realize your two options are finance and tech,\u201d said Ms. Kamal, 29, noting that those fields offer the most pay and help with work visas.<\/p>\n
But after that summer in finance, she gravitated toward tech. \u201cI don\u2019t want to work 14 to 15 hours a day on something I don\u2019t care about because it pays a ridiculous amount of money,\u201d Ms. Kamal said. She now works for Apple.<\/p>\n
Still, not everyone is down on banking. Herby Dieujuste, 25, who worked one summer for JPMorgan\u2019s private bank and did a stint as a TD Bank teller, is studying for one of the required licenses for starting bankers while interviewing for investment banking positions. A longtime basketball player, he said it was unsurprising that the banking industry would treat its rookies as dismissively as a sports team might \u2014 until they proved themselves.<\/p>\n
\u201cI want to be somewhere where I know I can be for a decade or two, and I always saw finance as that kind of industry,\u201d he said.<\/p>\n