Why Goldman is golden
Why is it everyone’s investment bank of choice?
For those outside the industry, Goldman Sachs is the mythical beast of the banking sector. It might be the only name you know. But within the industry, it’s the zenith: in a survey of over 2,000 finance professionals in London this week, Goldman came out as the best place to work.
Is it all cigar smoke and mirrors? What’s so different about Goldman? We spoke to a 23-year-old Goldman analyst and Leeds graduate, and a 20-year-old intern at UCL to understand the bank at both levels. The analyst was offered a place at Merrill Lynch scheme but chose Goldman instead (he mentions the “gleaming” reputation); the intern was offered Citibank, but picked Goldman because they pay their interns.
What kind of person gets a job and rises through the ranks at Goldman? In 2013 they had 43,000 applications for just 1,900 available positions. Speaking at the time, their global head of human capital management said those who do well are “dynamic, intellectually curious and comfortable understanding that market forces can lead to opportunities and risk for our clients, being able to connect the dots to all of the things that are important to clients”.
And sure, the pay isn’t bad. A first year analyst will be on £51,000 a year plus bonuses for good performance. The perks are above average: their gym isn’t cheap, but all you need to bring are trainers as socks, gym clothes and a towel are provided – which means you could work out on a whim. Inside their exclusive office building on Fleet Street there’s also a dry cleaners and a Starbucks.
As far as interning goes Goldman isn’t just 18 hour days and fetching coffee, as is the industry norm today. They had to get their own lunch but got their dinner covered. The rate was a “£15 reimbursement from the cafeteria, or £15 take out order if it’s past 10pm.” Summer analyst interns make £3,796 per month.
“We have fun, but you have to be on your game all the time too,” the analyst says. He noted the “huge team spirit”: they go for group drinks every Friday, gel together well and throw a boat party for the new interns.
One huge perk for the class of 2015 is the new VP fast track scheme, taking new recruits from analyst to Vice President in just five years if they’re good enough. The analyst said: “People who get picked up to be fast tracked out of the grad scheme will earn more than other guys who are older and have more experience. But that doesn’t really bother anyone.”
Superficial things like perks and money (a big one for bankers) aside, what is it that makes Goldman different? “It’s not a secret that most banks are very similar – they all hire really talented and competent people, you end up working on the same, if not similar, deals.” we were told. “The culture of the bank is something that Goldman always stresses upon and once I was working there I understood what they meant by it,” he added. “I think a lot of people have misconceptions about the type of people who work here, but in reality we’re just very passionate about what they do. If you’re too arrogant or aggressive you won’t survive.”
On the other hand, Goldman pushes its army of analysts, associates and VPs to the limit, and their 72.4 average hours a week is excessive compared to the hours of a teacher or civil servant. They’re actually very tame when compared to the other banks, where an all-consuming job has long been part of life. Smaller, boutique firms like Moelis and Lazard edge closer to 90.
A big part of this is Goldman’s “Saturday rule”. It states: “All analysts and associates are required to be out of the office from 9pm on Friday until 9am on Sunday” meaning all the junior bankers are guaranteed at least one day off a week. Last year they also brought in the “midnight rule” for interns, ensuring they get home by 12 in a bid to end any association with the so-called “magic circle”, a first for the industry. In the words of when of their employees, Goldman glitters because “they want to keep you for life”.
And on that wage, they might.