A man walking in Canary Wharf, London, where many offices of global investment banks are located.
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Investment banks are increasingly embracing hybrid working to stem the loss of talent from the financial services industry as many employees are set to quit due to a lack of flexibility following the COVID-19 pandemic.

The past two years have seen a major reassessment of work and life priorities for staff across all industries, with investment banking not immune to this change. As activity exploded and the workload soared, especially for young bankers, staff departures accelerated, thus fueling the ongoing war for talent.

Meanwhile, quality of life has become an important factor in accepting or keeping a job in banking, with 56% of financial services employees saying in a recent survey that they would consider quitting due to a lack of work-life balance. Attractive pay no longer appears to be enough to retain the best and brightest in the profession, according to people familiar with the industry.

“Money is important but everyone pays,” said Clare Hart, CEO of Williams Lea, a provider of outsourcing services to global investment banks, law firms and consultancies. Providing extra flexibility in the workplace and making office visits meaningful for staff can make a big difference, she said in an interview.

jump ship

Almost a third, or 31%, of 300 financial services and banking professionals surveyed by UK digital accounting services provider LemonEdge in April said they were close to leaving the financial sector altogether. Additionally, 31% of respondents said they planned to change jobs in the sector. Among the main reasons for this “talent drain” are heavy workloads and long working hours, LemonEdge said.

Although bonuses hit record highs in 2021, attrition in investment banking, particularly among junior staff, has increased, said Logan Naidu, CEO of UK-based recruitment agency Dartmouth. Partners, in an interview. Although not something new, departures among junior bankers accelerated during the pandemic as workloads increased due to the boom in business last year, Naidu said.

In March 2021, an internal investigation showed that junior staff at The Goldman Sachs Group Inc., based in the United States, regularly worked 98 hours per week due to the surge in business activity and demanding senior managers. . Respondents said they were very likely to leave the bank within the next six months if this workload was not reduced. In April 2022, other Goldman Sachs junior bankers threatened to leave after group CEO David Solomon pressured staff to return to the office, Fortune reported, citing comments posted on the anonymous online message board Blind. .

Goldman Sachs did not respond to a request for comment.

Calling staff to the office five days a week after the pandemic seems too rigid a requirement, even in financial services. In a YouGov survey in April, 14% of employees in the sector said they always considered the office their main place of work, with 86% expecting work partially or entirely from home. More than half, or 56%, of the over 500 respondents cited quality of life as the main reason for considering quitting smoking in the next two years, the poll conducted by the UK-based market research firm on behalf of Bloomberg found.

The industry reacts

Increased attrition rates in investment banking are fueling the talent war, Naidu said, while career options outside the industry are on the rise. “Whether it’s on the buy-side and private equity side, or in fast-growing companies, there’s just more exit opportunity,” he said.

Banks are under increasing pressure to expand their search for new recruits beyond traditional channels, as talent is scarce everywhere. “You have fewer analysts and associates to choose from from other banks, so you’re looking at potentially hiring from smaller boutiques, etc…,” Naidu said.

Salaries have increased, especially for junior bankers, but that doesn’t change the fact that investment banking is a difficult industry in which to build a long-term career. It’s also a job where long hours are a staple of the industry. While banks can’t change the reality of work, many are considering ways to offer their staff a better work-life balance through hybrid or remote working, Naidu noted.

European policies versus American policies

Many of the world’s leading investment banks have implemented hybrid working arrangements. In Europe, UBS Group AG was among the first to promote flexibility. As early as August 2021, CEO Ralph Hamers called on banks to embrace hybrid working. In March this year, the Swiss-based group announced that it would offer all US-based employees the option to work entirely remotely.

In April, the French group BNP Paribas SA signed a remote working charter with union representatives in Europe, allowing more than 132,000 employees in 22 countries to work remotely 50% of the time, a spokesperson said.

Deutsche Bank AG is offering hybrid working options for all of its employees, including up to two days’ severance, or 40% of the working week, for investment banking staff, a spokesperson said. “Flexibility beyond 40% may also be granted in extenuating circumstances, subject to case-by-case review by Compliance and HR,” the spokesperson added.

In May, Credit Suisse Group AG CEO Thomas Gottstein told Bloomberg that it was unrealistic to expect staff to return to the office full-time. The bank did not provide additional comment on its hybrid working program when contacted by S&P Global Market Intelligence.

UK groups HSBC Holdings PLC and Barclays PLC have both said they are committed to providing employees with working flexibility. The banks were not available for comment at the time of publication.

In the United States, the tone of senior banking management is more conservative. Three of the five largest US investment banks, namely Goldman Sachs, Morgan Stanley and Bank of America Corp., have been pushing for staff to return to the office for most or even all of the week, in the case of Goldman Sachs.

The latter bank’s CEO, David Solomon, told a conference in February that working remotely was “an aberration”, and Morgan Stanley CEO James Gorman said at a business summit in March. that he expects staff to be in the office at least three to four days a week. . “If you can go to a restaurant, you can go to the office,” Gorman noted.

Bank of America has called on all of its US staff to return to the office full-time starting June 1.

The three banks did not respond to requests for comment.

JPMorgan Chase & Co., which was among the diehard supporters of the return-to-power movement last year, recently softened its stance. CEO Jamie Dimon told shareholders in April that only half of the bank’s staff would work full-time from the office. The bank did not respond to a request for comment.

Citigroup Inc. stands out as the most open to remote working among major U.S. banks, with co-head of group banking, capital markets and consulting, Manolo Falco, telling media last year that the hybrid work could give him a competitive edge over rivals in the talent war. Citi has pledged to offer hybrid work to most of its roughly 240,000 employees, a source familiar with the bank’s policies told Market Intelligence.

Hybrid work

The work model of the future is shaping up to be hybrid, and organizations can leverage this to drive employee retention, Hart said. A growing number of companies that Williams Lea has recently engaged with are looking for ways to ensure that their hybrid working model is successful and that collaboration and communication occur when staff come into the office.

Ohen we talk to our customers, one of the big issues is making sure people don’t jump ship. A big part of that is making sure they feel the purpose of being at their bank and having the opportunity to learn and grow,” Hart said.

This is especially important for bringing junior bankers into the organization’s environment and culture, Hart said. “If the senior banker is in the office but he’s ignoring you, that’s not good,” Hart said.