Shortly after the death of an overworked Bank of America intern in London in 2013, a M&A analyst at a major investment bank remembers meeting up when leaving his Canary Wharf tower at 11 p.m.

“I feel the capacity,” a more experienced banker told him – that is, free time that could be spent on work.

He never reported the incident for fear of reprisal. A few years later, exhausted by shifts of 15 hours a day, seven days a week, he resigned. He brought up the incident during his exit interview as a reason he would never come back.

Seven years after the death of Moritz Erhardt, 21, investment banks once again find themselves defending the hours they demand of young workers, after exhausted Goldman Sachs analysts released a slideshow detailing the brutal weeks of 95 hours and abuse in the workplace, exacerbated. by isolating homework during the pandemic.

Their protest captured the spirit of the moment. A slew of banks have since sent memos and issued press releases pledging to change the way staff work. But will it be different this time around?

Senior executives clearly feel the pressure to do, or at least say, something. Goldman chief executive David Solomon spoke out in favor of dissenting analysts and promised more humane hours. Jane Fraser, chief of Citigroup, sent staff a memo calling for a ‘reset’ of working life, including limits on video calls and flexible working arrangements after the pandemic has passed.

Other banks are offering benefits and salary increases to junior staff: Jefferies donated Peloton exercise bikes; Credit Suisse pays junior bankers bonuses of $ 20,000. Several banks have said they plan to hire more staff, to ease the burden on existing employees.

Sara Wechter, head of human resources at Citigroup, told the Financial Times that while “everything is overwhelming and difficult right now,” the bank was considering how to provide its employees with a better work-life balance long before the Fraser’s note. She cited a company-wide day off that started last year and will be repeated this year. “We took a close look at the hours worked, we wanted to make sure there weren’t pockets of people working too hard. This is something that management is extremely sensitive to.

Either way, a working model that was taken for granted across the industry is now the subject of much debate. An early career analyst at Morgan Stanley said Goldman’s presentation was “all his colleagues could talk about,” debating whether they should also protest or accept that they signed up for a high-paying but difficult job .

“On the one hand, I signed up as an investment banking analyst, I knew I was going to work extremely hard, I knew people would be rude sometimes. But on the other hand, we wonder if the reality has exceeded our expectations.

A former Goldman bank analyst, who quit after two years, said his friends’ opinions were mixed. “The older guys’ point of view is, shut up or quit. For guys who are raising young children while managing the workload, the mentality is ‘we’ve all been there’. The flip side is that being home alone is not conducive to your mental health. What made my stay at Goldman enjoyable was the camaraderie.

Despite the change in attitude, many in the banking industry are cynical about the possibility of a significant change © Chris Ratcliffe / Bloomberg

Many first-year analysts have never seen their colleagues or bosses other than onscreen. “Every time I leave my screen to take a walk or take a break, I have to communicate it to my vice president,” said an analyst at a boutique investment bank. “Everyone is constantly afraid of being watched. . . it is a huge invasion of our privacy. Another analyst called the technology watch a “virtual leash”.

It has been a particularly busy year for transactions, and on top of that, the boom in special purpose acquisition companies has surprised many banks. Spacs, which collect liquidity on the stock market and later seek out a company to go public, are suddenly hot, with more than 500 launched in the past 12 months. “The Spac affair has just taken over our lives,” said a young banker from a large investment bank.

The industry has also changed. In 1994 Brian Mullen, then managing director of boutique investment bank Donaldson, Lufkin & Jenrette, wrote a now famous memo in response to complaints about over-busy staff. “Let’s define ‘busy’. You are busy” [if] you work every day of the week at least 4 pm and at least 4 pm on weekends, ”he wrote. “If it’s not your office hours, you have the capacity to take on more work. “

Now he takes a different point of view, writing that although he has never regretted the post, “In the 1980s [and] In the 1990s, the investment banking industry was growing at a rate of 20% per year and the margins were considerably higher. . . margins have shrunk with growth, and winning business increasingly depends on the franchise rather than the individual. Given the limited opportunities offered by the industry, asking too much would only alienate employees, he said.

A senior banker noted that other industries, such as tech and private equity, now offer graduates similar salaries but with better lifestyles. “Investment banks can’t use the club anymore, can’t say ‘if you want to get paid you have to suck it’ – it’s not as sexy as an industry anymore.”

Despite the change in attitude, many in the industry are cynical about the possibility of significant change. Peer pressure and entrenched middle managers stand in the way, who have more influence on the careers of young bankers than well-meaning executives.

“We are all nervous to say that when we are in trouble we have occupational health programs [but] if you switch to one, the bank can legally prevent you from working, which we are terrified of that happening as it will end our careers and let our colleagues know that we cannot handle it ” , said an executive director of a world bank. She calls recent memos and press releases a “hilarious” repeat of the empty rhetoric of 2013.

Cynicism can be justified. Deniz Okat and Ellapulli Vasudevan, two academics, studied the effect of no-Saturday policies instituted by investment banks after Erhardt’s death. They looked at data on millions of cab rides between the headquarters of 10 investment banks in New York City and residential neighborhoods, and found that while Saturday rides declined, late night cab rides the rest. nights were increasing considerably. “Politics backfired by making bankers work longer on unprotected days,” they concluded.

Changing the incentives was key, several bankers said. “Bankers and traders are motivated by money,” said a senior trader. “I’ve seen in the past some banks giving discretionary bonuses to middle managers based on graduate retention, and that seems like the only way to force change. She noted that it’s the incentives for office managers and other middle managers, rather than senior managers, that matter.

Customer incentives are also important. Banks charge a flat fee rather than billing by the hour, making the job of junior bankers effectively free. “Bankers are seen as free and unlimited resources,” said a former banker who now works on the corporate side. “Everyone says, bankers add no value, so let’s take advantage of it. “

Mel Newton, head of financial services personnel consulting at KPMG, believes that working young bankers for very long hours is a poor strategy for maximizing productivity. She acknowledged that there was a “supply-demand imbalance” where many young people lined up for analyst positions, so there was a temptation to work them hard. But “are they really that productive between seven o’clock and midnight?” I would doubt it, and certainly after three or four days of that, they probably aren’t able to do a good job. ”

The solution, she argued, was “to educate senior executives on what really boosts productivity in their workplace: is it long hours or happy employees?” You will get a lot more out of a group of people who love to work, love organization, and feel valued. Customers are demanding, “but it’s up to the banks to set those limits.”

The former banker who was reprimanded for leaving work at 11pm recalled that “a lot of what I have done can be taken away. The work was unnecessary. . . the best bankers are those who come in with two to three pages or no presentation at all because they know what they are talking about.

However, many bankers who spoke to the FT learned some bright spots from their early years in the industry. The former Goldman analyst said, “Analysts who join a Goldman or an Evercore? They are all alphas. They have all been very successful in everything they have done. I didn’t want to work less. I wanted responsibility. That scenario where you hire twice as many analysts and they work half as many? I wouldn’t want to work in this environment.

Additional reporting by Owen Walker and Francesca on Friday

Letter in response to this article:

Paying juniors more won’t cure banker exhaustion /By Hans TW Frankort, Reader in Strategy, Bayes Business School (formerly Cass), London EC1, UK