
Young Bankers Fed Up With 90-Hour Weeks Move to Startups - arch_stanton
http://www.bloomberg.com/news/2014-05-09/young-bankers-fed-up-with-90-hour-weeks-move-to-startups.html
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morgante
While some certainly choose to leave finance for startups, I think they and
far between. Who in their right mind chooses to give up a huge salary in favor
of an equivalently time intensive startup which pays 1/10 as well?

> data from the U.S. Census Bureau show that the number of employees aged 25
> to 34 in the New York metropolitan area in finance and insurance fell to
> 109,187 as of the second quarter of 2013, down 19 percent from the second
> quarter of 2007.

This definitely has nothing to do with the financial crisis which happened in
the intervening years and the ensuing mass layoffs on Wall St.

~~~
vanderZwan
> _Who in their right mind chooses to give up a huge salary in favor of an
> equivalently time intensive startup which pays 1 /10 as well?_

If that one tenth the salary is enough to cover your monetary needs, then why
pay the price for the other nine tenths?

~~~
enraged_camel
It may be enough to cover your needs _now_ , but most people want to be able
to do things like support families and save for retirement.

(Granted, 90 hours a week is terrible for family life.)

~~~
vanderZwan
And what part of my comment implied "covering monetary needs" does not include
that?

~~~
tomp
The assumption that 1/10 of an analyst/associate in a bank will be enough to
get you to retirement.

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stephencanon
I have very low expectations for an article that leads with a photo of two
“MBA candidates” at Princeton. (Princeton has no business school, so doesn’t
award MBAs).

~~~
secondForty
The business school is located right behind the medical school

~~~
rb2k_
And for all the fellow foreigners:

"Princeton provides undergraduate and graduate instruction in the humanities,
social sciences, natural sciences, and engineering.[13] It does not have
schools of medicine, law, divinity, education, nor business, but it does offer
professional degrees through the Woodrow Wilson School of Public and
International Affairs, the School of Engineering and Applied Science, the
School of Architecture and the Bendheim Center for Finance."

:)

~~~
twic
No school of divinity?

 _drops monocle from eye in shock_

~~~
stephencanon
On the other hand, they do have an excellent religion department.

------
Zigurd
What's really interesting is what is absent from the article: An actual reason
for junior employees to work 90 hour weeks.

There is no plausible task or process in ibanking that requires that. It
amounts to a form of hazing. It's an industry gratuitously consuming the
people in it, as if that would justify their subsequent compensation.

Here is a telling quote:

 _“Culture really matters,” says Podolsky, 33, a Wharton graduate. “How the
bullpen interacts is critical. You can work 80 hours a week and not mind it so
much because the people you work with are awesome.”_

Not a hint, not a whiff of _why_ this culture matters. Why wouldn't it be
forgotten 5 minutes after it's over. It's an unusually pure delusion.

~~~
anigbrowl
Well, people are proud of being competitive; but more to the point, if they
like the sort of work they're doing, then they don't mind doing it to
extremes, for a while at least. I do film production, and when that's in full
swing it's 80-hour weeks, albeit for only a month or two at a time. It's not
all that profitable (partly because I can't move to LA), and work product is
sadly lacking in cultural value as often as not, but the work itself is very
satisfying.

------
wil421
Why would anyone knowingly subject themselves to 80-90 hour weeks. The money
and success you make in the short term could very well be overshadowed by
health problems.

A guy at my work doing high stress support work recently had a heart attack.

~~~
pessimizer
People aren't that delicate. I've known _factory workers_ who've done 50-80
hour weeks for decades on end. When I was a machine operator at Harte-Hanks
outside of Baltimore, I worked a 76 hour week without a day off for three
months straight (12h * 5, 8h * 2). They refused to open the plant on
Thanksgiving, so it broke my streak.

Right now, somebody in Germany is wondering how I can deal with only having 2
weeks of vacation a year, and speculating that it could lead to serious
medical problems.

My father had a series of mini-strokes after having a pleasant salmon dinner.

~~~
gohrt
50-80, 80-90, 90-110, any difference?

Factory work can be high or low stress, depending on the pacing and risk of
injury.

~~~
wil421
My thinking exactly, if you are only screwing bolt A and B to nut A and B
every time I dont think you have a lot of job stress, youre just working long
hours.

I knew a guy who worked 60 hours a week putting stickers on a package he loved
his job. No stress and his productivity determined his pay no.

------
collyw
Are startups not another area where working silly hours is considered somewhat
normal?

~~~
rjf1990
Startups are rarely as bad as banking, where you can do 100 hour weeks several
weeks in a row, have vacations canceled, miss weddings and funerals. Even
though you're expected to work more at startups, most founders realize their
employees need time off. I could be wrong, but I'd say a majority of startup
employees work less than 60 hours per week.

Also the work at investment banks is boring and monotonous. Doing 100 page
pitch decks, knowing very well that 90 of them are going to get thrown out.

~~~
Hansi
Banking != investment banking. I work in asset management I do a 45 hour week
most of the time, with very few exceptions.

~~~
rjf1990
Sorry, I've come to use the terms interchangeably. That's what happens when
your friends are all investment bankers.

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jroseattle
This article got me thinking about the frying pan (investment banks) and the
frier (startups.)

I _just_ pulled an all-nighter in my company (note: I'm our CTO). We needed to
put a new capability in for our team as part of a rollout of a big new feature
that integrates with other customers. I was glad to do the work and put in the
time.

I just so happened to interview a candidate the following day (I think it was
hour 34). He's very eager -- wants the "fast-pace of a startup", "meaningful
work", "make an impact and see the results". He currently works at TechBigCo
in Seattle -- take your pick, I hear the same words over and over from
candidates who work at these places.

We talked about what it's like at our company, and I explained what we just
went through with _ALL_ the caveats -- atypical, I made the decision on
timing, it's a startup, etc.

The candidate was completely turned off and said he could not work for a place
that would ever condone that amount of time or that decision. I explained that
my team didn't pull an all-nighter -- I was the one who did, because I made a
decision (business ultra-critical level), and that decision would affect only
me in terms of time. I explained that it's because I have a vested interest in
seeing the company succeed. He didn't accept it and has dropped out of
consideration for our role.

The candidate's response surprised me -- he viewed my action, even as a one-
time event, as something that could happen again in the future. He's right --
it very well could, although we're managing our growth (much of the cause of
this situation) to balance against our resources. We also have a business to
grow, and sometimes success can be dictated by timeframes. That was the case
here.

~~~
talmand
Was it mentioned what was going to happen after the time spent on the project?

If I were that candidate and it was mentioned that once the emergency was past
you were going to take two or three days off (not counting against days off)
to unwind, then I would take that as a fair trade of time.

If it was expected for you to show up the next day and continue on as if
nothing happened then I would pass too. That's a sign your company doesn't
respect people's time. Which as CTO reflects on you.

The rules may be different for you being CTO and you have a vested interest in
the company succeeding, but it's hard to communicate that to someone that you
also don't have vested interest enough to get someone else to spend the extra
time with no real recognition or compensation.

~~~
jroseattle
Yeah, all things mentioned that you would expect as reasonable -- this was
strictly my decision, I didn't ask this of anyone else, and indeed I'll take
some time because I could use the rest.

The candidate still wasn't accepting of any decision. Frankly, I don't think
it was the timecrunch that really bothered him -- it was the effort associated
with it. Purely a hunch on my part, but I think there is a question of
adaptability, task-switching and dealing with re-prioritization.

As for expectations I set with my employees, I insist on work/life balance.
Several on my staff have kids (I do as well). A few are in soccer leagues.
Others do only knows what in the off-hours. My expectation is that time away
from work greatly enhances productivity when at work, so it's a payoff for us.
We have long-term goals, and I want to keep the crew we have around us happy
and hungry (for success.)

------
talmand
“I’m not sure how you stop work if there’s a deal on..."

This makes me the think the guy is totally clueless and doesn't understand
time management. Why is it that these types of people think you absolutely
must squeeze in two weeks worth of work in three days? What's so important
that you can't take the time to do it properly the first time without doing it
in a manner that almost literally kills the staff? What's wrong with saying
"hey, you've been on this for ten hours today, go home and rest up to hit it
fresh in the morning"? Seems logic dictates productivity would increase in
that case.

Then he follows up with "Hey, have we got this right?" If you don't realize
that right off after someone freaking dies essentially doing their job then
you are clueless.

But, I'm a developer, so what do I know?

~~~
crazypyro
Banking moves fast. Can you seriously not imagine one of the hundred
possibilities that would require immediate action? Banks also have huge
customers that they simply don't say "No" to, without consequences.

~~~
talmand
I can imagine situations that require heavy hours to accomplish in the time
frame required. I'm a developer, I do it all the time but not as a standard
work week.

But I cannot imagine that there is always a situation one after the other that
requires people to put in that amount of time for weeks or months at a go.

If they are working their people that much for that long, they haven't hired
enough people to cover the workload and are taking advantage of the people
they do have.

~~~
rjf1990
As crazypyro said, deals move fast. These are often billion dollar decisions
clients are making. If a bank can't turn it around quickly, they'll lose the
deal. With only a few deals going through every year, they have to keep them.

The unpredictability of client demands makes division of labor much more
difficult. This article does a good job of explaining why investment banks
cannot simply hire more people.

[http://www.mergersandinquisitions.com/why-you-actually-
work-...](http://www.mergersandinquisitions.com/why-you-actually-work-so-much-
as-an-investment-banker-yes-even-in-a-recession/)

~~~
talmand
What? So only banks have those problems? No other industry has similar issues
that have not been figured out? How does any company with hundreds of
employees and dozens of people on any one project ever get anything done?

Seems to me the article supports my thought that these people are just not
that good at managing people and projects.

If I were of a conspiracy thinking mind I would suspect that the labor pool is
kept artificially low to keep income levels high.

And if we're only talking a few big deals a year then how is it that people
are working 100 hour weeks constantly?

~~~
rjf1990
It makes sense if you understand how the deal process works.

It's unlike other industries where you can plan ahead and delegate
accordingly. If you're building software, you have the luxury of a 6 month
plan with set milestones and deadlines. With deals, the work changes several
times per day based on demands of the client. If you're the CEO of a multi-
billion dollar company bidding on another company worth several hundred
million, you're going to have questions and requests every step of the way.
Investment bankers have to respond to those requests in real time.

Because of the dynamic nature of these deals, 2 people working 40 hours per
week is less productive than 1 person doing 80. Each person on a deal has to
be intimately familiar with the deal, and hold a lot of information in their
head. The incremental communication (and potential for miscommunication) that
would occur between 2 40 hour workers simply wouldn't work.

A few big deals per year is what you see - they only get paid when a deal goes
through. Depending on the division, it's not uncommon for 1/10 deals to go
through, and that doesn't even include the pitching that does on.

Also, it's not 80 hours of straight work (most of the time). There's a lot of
down time while you wait for clients to respond. Another reason why 2 40 hour
workers wouldn't replace 1 80 hour worker.

------
tzier
From a hiring perspective: if you're at a start-up, take advantage of the
trend and try to hire these people who want out after their 2-3 years. They
know how to get stuff done in crunch periods and are still young enough where
their creativity hasn't been (totally) crushed. Bonus points for a former Big
4 auditor--they tend to have the same work ethic but without the entitlement.
[1]

Disclaimer: former Big 4 auditor but used to run a finance org, so have tons
of friends in both (many of which have made the transition)

[1] Bit of a stereotype here, but most i-bankers get used to the huge salaries
and massive expense budgets, which auditors and tech startups don't have.

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jtheory
A sign of how nonsensical it is -- here's their fix:

> Junior bankers who keep lighting up red, and the people who manage them,
> typically get a call from Urwin to find out what they are working on and if
> the hours are justified. If not, the manager requesting the work may get a
> warning.

So if your underlings _keep_ lighting up red, they'll check to see "if the
hours are justified", and you may get a warning if they are not.

In other words -- we don't want you killing the junior bankers just for your
own entertainment; please only kill them if it's going to make us a lot of
money. THEN it's just fine.

~~~
tzier
A "warning" typically just leads to analysts eating hours (not recording all
the hours they actually worked), especially for fixed fee projects.

------
QuadDamaged
Here in London, Barclays is about to boot 7k staff from its investment banking
division. The writing was already on the wall for contractors, bankers looking
for another industry is par for the course.

------
nutjob2
...move to startups and 120 hour weeks.

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gadders
The thing is, you do have to work hard for those Investmen Banking/M&A type
jobs, but do you seriously think jobs with a £2m+ earning potential would be
given away?

You're better off thinking of your first few years as the office equivalent of
Hell Week for a Navy Seal.

------
protomyth
How much of this work is the result of the US tax system?

~~~
rayiner
You mean the finance work? Although almost all of it has tax implications,
most actual tax work is handled by accounting and law firms. The finance folks
do the bread and butter of corporate financial transactions and asset
management. They underwrite IPO's, put together bond issues, arrange lines of
credit, and work out mergers and divestitures. Very little of it arises due to
the tax system. Even the law firms doing the legal side of these transactions
don't devote huge resources to tax. The NYC firm where I used to work, which
had a top-rated tax practice, had about 1/10 as many lawyers working on tax
matters as they did working on M&A or securities matters. I'd imagine the
accounting firms have a higher percentage of tax people, though.

~~~
protomyth
So, if a federal flat-rate tax[1] was set, it wouldn't significantly reduce
the workload?

1) revenue * tax rate = taxes (asking question, not advocating)

~~~
rayiner
A flat tax isn't revenue * tax_rate. It's income * tax_rate. You have to
subtract expenses from revenue, otherwise your tax is totally arbitrary. A
company like Wal-Mart makes 5-6% operating income on revenues, after paying
for rent, workers, inventory, etc. Even a 10% tax on revenue would wipe them
out.

Most of the work in taxes is getting from revenue down to taxable income, and
after that it's just a number you plug into a spreadsheet. For individuals, a
flat tax would make calculating taxes much easier, but that's because their
tax situation is dead simple to begin with. But for a business, you still have
hard issues like depreciation rates for capital equipment, carryforwards, etc,
and those don't go away with a flat tax.

And in any case, none of this has much to do with the finance industry. They
might ask their tax lawyer: "what's the tax implications of spinning off this
subsidiary as a separate company?" and a simpler tax code might reduce that
bill, but it's not work they'd be doing themselves. Their job in that
situation would be to plan and analyze the divestiture. What kind of cash flow
will the stand-alone company have? What assets should go with it? Then the
lawyers will get involved and do stuff like draft the asset purchase agreement
between the seller and the buyer, or the agreement that allows the spun-off
company to continue to use certain IP belonging to the seller. And the
accountants will, well, do the accounting for all of this. None of this work
goes away just because the tax code is simpler.

~~~
protomyth
yeah, I should have put income. I was pretty much asking if tax law was
driving some of the hours - guess not.

------
francoisdevlin
People don't understand the value of their time, news at 11.

~~~
insteadof
You've already given out the news, it's the film that comes at 11.

