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 I never took a course in economics at university. Granted, this may have been a mistake—a classically unconscious, feminine mistake— as I instead threw myself into literature and film studies. And so, when I sat down for a five-hour chat-marathon with a former investment banker this past weekend, I had a lot to learn. And, as opposed to in my defiant I-don’t-need-excel-models college days, this time I was desperate to learn. Not getting acquainted with the basics of how the financial world works, giggling naively at the mention of stocks and freezing up at the thought of investing— these are all typical mistakes that women make. Which, in turn, may be a big reason why women fall into financial dependence on a spouse more often than men. “I’ll let him deal with that,” we think. Big mistake. But that is another blog entirely.
Now, back to my investment banker. Let’s call him Steve. Steve is a multilingual wiz in his mid-twenties who has worked in finance in New York and London and has now jumped ship to Moscow— the new goldmine of opportunity for those ready to play hard and bend the rules. Steve has pulled out of banking altogether in favor of taking the full plunge into Russian bizniz- Oligarks galore and so on. Nonetheless, he had some very interesting insights into why investment bankers really work as hard as they do, and why work conditions vary between financial capitals.
First off, Steve explains the long hours:
“Say you are merging two companies. Imagine all the work it takes to consolidate two independent operational, infrastructural and financial organizations. Then, keep in mind that the merger itself must be kept secret until is has been completed and can be officially announced. Otherwise, one of the competing banks may pick it up and you lose the deal. Or, the market may hear of it and begin to short your stock. The bottom line is that the job must be kept top secret. How do you do that? You tell as few people as possible, say five people, thus employing a need-to-know based system. These five people are now responsible for completing the inhumane amount of work it takes to merge two companies in an inhumanely short amount of time for fear of the information leaking out. What do we get? 18-hour days. Sorry, Lattice team, there is no way to change that.”
But, there are different ways of treating your employees. And, according to Steve, attitudes vary between banks, and between countries.
According to Steve, in New York everyone wants to get out of banking as soon as possible. Enter as an analyst and leave when you have had your three or so years of experience. Move on to better hours and better pay in hedge funds, private equity and so on. In London, on the other hand, Steve asserts that the majority of entering analysts hope to stay on and ascend the ranks to managerial positions. Why this difference? “Less alternative opportunities,” he says. The result is that you are treated as a banker in London, while in New York, you are a measly analyst buried under a pile of processing work. Do the actual work conditions vary that much? “Not really,” Steve says “The hours and the work are the same, but at least you’re treated as a ‘real’ banker.”
Then there is the example of the Russian investment bank that Steve’s friend works at here in Moscow. Rather than training analysts to rise up as managers, this bank has the policy of head hunting already trained expert executives from other banks by luring them with huge salaries. What this means in practice is that the analysts in this system are not valued highly and are treated accordingly. There is no need to reward them handsomely since the company goal is not to retain them, but to use them for all they’ve got and then throw them away—or let them leave when they’re broken down enough. Wear and tear sums up their policy. Steve describes his friend who works as a first-year analyst at this Russian bank as the hardest working investment banker he has ever met. His regular workday spans the unbelievable hours of 8 am to 4 am, including weekends.
When I look shocked, Steve winks at me and assures me that the human body can get used to anything. “Soon enough, four hours of sleep seems like all you need.”
But I am left to wonder: is this really efficient? Cultivating innovation is obviously not the Russian bank’s strategy for analysts, but what about in London and New York where the hours are nearly as long? Do 16-hour work days really yield desirable results? How good is your work on the 16th hour, how accountable your numbers? “Not very,” Steve admits. “You make a lot of mistakes. The key is to make few enough not to be fired.”
That sure doesn’t seem like the best system to me. I’m in Russia, I know that business is bizniz, so forget the human aspects for a moment (though it pinches my Lattice heart strings to do so) and ask: What if a bank truly made an effort to maximize productivity as well as innovation by making things just a little less insane? More sleep equals less costly mistakes, and perhaps better deals, no?
Or perhaps that is just my know-nothing-about-finance mind talking and you should just send me back to my books and let you get back to your 20-hour shift. Just don’t complain about it. No matter how much your life sucks, you know what you signed up for— and you have the bonus to show for it.
- Astri photo by Tracy O on Flickr under Creative Commons License
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