Wall Street’s Hottest Commodity: College Grads With Excel Skills

Mary Biekert | Wall Street Journal

All across Wall Street, one price keeps going up: the one for young talent.

Big banks can’t hire junior staff fast enough — not even at the new going rate of $100,000 a year. Chalk it up to the pandemic. Or the notoriously long hours. Or youthful realizations that maybe banking isn’t all it’s cracked up to be.

All of those reasons — and others, too — have conspired to make 2021 one of the toughest years for Wall Street recruiting in recent memory. For now, at least, the war for talent keeps escalating.

One major lender has resorted to Oculus virtual reality headsets to train up newbies faster. JPMorgan Chase & Co. has raised its hiring target by several hundred people. Virtually every major bank has bumped up base pay for entry-level analysts and bankers by roughly 17%, setting a new industry standard of $100,000 — sometimes more as is the case with Goldman Sachs Group Inc., which lifted its base pay for first-year analysts to $110,000.

Not even that has been enough to put people in seats, or at least on Zoom calls. Executives in more traditional areas of finance worry that private equity, one of the more lucrative corners of Wall Street, will siphon off even more talent this coming year. Technology and consulting are, as ever, competing for new hires too.

That’s good news for young people looking to break into finance. But it’s bad news for the banking industry, which is simultaneously experiencing an unusually high amount of churn, particularly among junior staff. With annual summer internships about to wind down, trading desks and investment banking units are bracing for a sudden shortage of young Excel whizzes to do the donkey work.

“This has been a turnover year,” said Alan Johnson, managing director of Wall Street compensation consultancy Johnson Associates. To avoid getting caught short-handed, banks will probably try to over-hire junior staffers. “They probably want to have a few too many,” he said.

Goldman Sachs Chief Executive Officer David Solomon promised to accelerate hiring of new junior bankers in March. He made that vow after a group of his bank’s analysts raised the alarm about 100-hour work weeks and the strains on their health in a presentation that exploded on social media.

JP Morgan in April said it would hire 190 extra bankers including junior staff to deal with a surge in dealmaking. It typically has about 1,000 investment banking analysts and associates, which are both junior positions, at a time. It’s bumped that number by a few hundred to contend with the record deal flow, according to a person familiar with the matter, who asked not to be identified discussing private information.

Talent Competition

“Firms over the course of the past year are recognizing more and more that you’re better off having two or three analysts with extra bandwidth for projects than one analyst who is working 16 hours a day, seven days a week,” said Brian Marks, who trains incoming junior analysts for many of the big banks at Knopman Marks Financial Training.

Banks are also competing for talent with private equity firms which typically plan large-scale recruiting efforts in fall. They often target bankers in the analyst programs, with the goal of locking in the young employees months or even weeks into their two-year classes. Then they start when those programs conclude.

“It’s like someone has done all the draft prep and all the scouting,” said Rob Dicks, talent and organization lead for capital markets in North America at Accenture Plc. “And then it’s like you would go sign that person as a free agent immediately after someone else has done all the research.”

Blackstone Group Inc., Carlyle Group Inc., KKR & Co. Inc. and Apollo Global Management Inc. are among firms that have fall recruitment programs, people familiar with the matter said. Recruitment consultants also say private equity firms may decide to poach junior talent directly later this year, piling more pressure on banks to pad out their work force now. Sponsored Content Why Bold Climate Leadership Is the Path to Business Success Trane Technologies

Amid the churn, demand has also forced banks to dig deeper and turn to non-traditional sources such as consulting and research firms, according to Robin Judson, of financial recruitment firm Robin Judson Partners.

Hiring Rampage

“There’s a confluence happening where offers are going out for first years as second years are leaving at the same time,” Judson said. “We have a client who called us and said they lost five analysts and one associate from one team in the course of just a few weeks.”

Marks, a partner at Knopman Marks, has been slammed with new classes amid the hiring rampage unlike any he says he’s seen. The classes his firm teaches, which typically last five to six weeks, expanded from 100 to as many as 130, he said.

“We are seeing additional hires come on every single week to a program,” he said. “The HR effort and the recruiting effort for firms has not stopped. And that’s been a persistent theme for almost a year now.”

— With assistance by Melissa Karsh, and David Gillen

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