Banks need to root out the “waterfall of inefficiencies” to improve work-life balance for juniors, but the long hours culture is unlikely to disappear entirely, according to one of JPMorgan’s top investment bankers.
With a laser focus on improving the brutal hours of junior bankers currently, firms face pressure to overhaul old ways of working, Vis Raghavan, chief executive of Europe, the Middle East and Africa at JPMorgan told Financial News in a wide-ranging interview, but the job will still “come with an element of sacrifice”, he said.
“The seasonality and unpredictability of the business is not going to change,” he said. “You will still have a call from a client on a Thursday who wants a deal ready to go before the market opens on a Monday and you have to do whatever it takes to get the transaction done. That’s the nature of the game, but we can cut out unnecessary work.”
Senior dealmakers need to organize their time better to avoid dropping work on juniors at the last minute, and banks need to use technology to help with some of the time-consuming manual analysis, he said.
“That can create a waterfall of inefficiencies, which might include feeling the need to produce big chunky pitchbooks that are barely flicked through by clients who never asked for them in the first place. Or generational issues like a VP used to working all night on deals and expecting juniors to do the same. It’s these kinds of issues that really need to be rooted out,” said Raghavan, who is also co-global head of investment banking at JPMorgan.
JPMorgan increased pay for both analysts and associates earlier this year, joining the majority of investment banks by offering starting salaries of $100,000. The US banking giant has ramped up recruitment of juniors — hiring an additional 190 people this year to alleviate the workload. It also has an ‘intensity’ program where it logs the hours of analysts to ensure no one is clocking too much time and a ‘pencils down’ policy on Friday evenings, according to analysts.
Banks continue to face a burnout crisis in the junior ranks, which has led to greater numbers quitting the industry and increased competition for talent. The focus on banks’ hard-charging culture came after a leaked presentation by a group of Goldman Sachs analysts in March, which outlined 100-hour weeks and a strain on mental health.
Part of the surge in workload is down to an unprecedented amount of deal activity. Investment banks have hauled in a record $93bn in fees during the first nine months of 2021, according to data provider Dealogic, and dealmakers have struggled to keep up.
“There has always been a desire to modulate work-life balance, but the pendulum often swings back as the frenetic pace of activity comes in,” said Raghavan.
“The sheer volume of deals has been a challenge this year, simply because there are not enough hours in the day to get the work done. We’ve had to turn some business away, but I would say the situation is a bit of an anomaly — a byproduct of all the excess liquidity we’ve seen, which has stirred up a lot of activity in the market,” he said.
Raghavan added that bankers’ long hours were always likely to remain part of the job.
“This is an industry that’s exceptionally well-compensated. There are a lot of industries where people are working long hours without the same rewards. This does come with an element of sacrifice. We put clients at the centre of everything we do and that’s not going to change,” he said.
JPMorgan has also been among the most active banks in encouraging its UK employees back to the office as Covid-19 restrictions have been lifted. Raghavan said that hybrid work was still encouraged, but that frontline roles require more in-office interaction than other jobs.
“Being mentored and being part of the cultural framework is incredibly important. Generationally, there’s already some disadvantage to the first-year analyst population who have missed out on learning from their colleagues,” he said. “A lot of the gold dust comes from being with colleagues and knowing what it is to work for JPMorgan.”
Banks struggled to maintain a clear return to office schedule amid Covid spikes last year that led to renewed lockdowns. In recent weeks UK Covid cases have increased, even if hospitalisations have remained low, and some scientists have suggested a fresh spike is on the horizon this winter.
“My main worry is the stop-starts,” said Raghavan of the new normal of work. “We had a period last year when a lot of companies brought a lot of people back into the office, but then the savage return of the second and third wave of Covid reversed that.
“There has been talk about new restrictive measures in some countries and I do worry whether it’s two steps forward and one step back. What does that do? Right now, there’s a team spirit and people are enjoying being back together, and hybrid is working. I just hope we don’t lose some of the momentum we’ve gained recently, but we will reverse course again if we need to.”
Source: Financial News
