Goldman Sachs, the Wall Street powerhouse and notorious “Vampire Squid,” might be the last organization you'd expect to be proactive in addressing the problem of overworked employees, but it’s doing just that. Goldman Sachs is actively discouraging its junior-level analysts from working weekends, according to reports.
Though Goldman hasn't come out and said it, the genesis of this push may be traced back, at least in part, to the tragic death of a Bank of America Merrill Lynch intern this summer. And the implementation of such culture-changing policies, based on the recommendations of a “junior banker task force,” comes at a time when Wall Street institutions are struggling more than they have in years to lure the most promising college graduates.
The death in August of 21-year-old Bank of America Merrill Lynch intern Moritz Erhardt sparked waves of discussion about Wall Street’s work culture. Erhardt was found dead in the shower of his London flat, after what unconfirmed reports described as three consecutive all-nighters. There’s no proof that three straight days of working until 6 a.m. killed him, but the reports raised questions about the mental and physical strains on Erhardt, who was also epileptic.
His death caused a media uproar, with at least one doctor going on record as saying the treatment of investment-banking interns was "inhumane." Bank of America said it would form a committee to review Erhardt’s death and the working conditions of junior employees. It was probably inevitable that the media uproar would be followed by, if not exactly a governmental uproar, then at least a governmental check-up. That's where Goldman Sachs comes in.
Not long after Erhardt's death, Goldman's Zurich office received a visit from the Office for Economy and Labor, or AWA, a Swiss labor-practices watchdog. AWA was responding to a complaint regarding the bank's timekeeping practices – specifically, whether Goldman was keeping track of the hours its Zurich employees worked. Since news of the visit broke, nothing more about it has been revealed by either side. But it didn't take long for Goldman to announce it would be easing up on its junior-level analysts, in particular that it would be hiring 14 percent more analysts for 2014, presumably to lighten individual workloads.
Goldman Sachs has been scrambling to repair its image ever since the financial crisis. Up until then, Goldman had been, well, the gold standard when it came to investment banking. It's famous motto to be "long-term greedy" implied the bank cared more about its clients, its reputation, and its collaborative internal culture than turning a quick buck. Then, revelations that the bank played both ends of the housing market in the run-up to the crash— leading to a $550 million federal fine – and a blistering New York Times op-ed resignation penned by dispirited employee Greg Smith in 2012 have, along with other missteps, tarnished the bank's once sterling image.
In the wake of the financial crisis, Goldman and other banks have also lost some ground to technology and telecom companies in the competition to recruit the best and brightest college graduates and MBAs. This year, 27 percent of Harvard MBA graduates went into financial services, down from 45 percent in 2008.
So is Goldman's move to ease up on its junior-level bankers the real thing – a genuine concern for the health and well being of its youngest, generally most used-and-abused employees – or is it just another attempt at image repair? Likely a bit of both. The Wall Street titan's image still needs all the help it can get, and that image certainly isn't helped if its best and brightest drop dead on the job.