Sounds like a great job if you can get it. Citigroup has opened a new hub for junior investment bankers in Málaga, a Spanish city better known for its beaches than its finances.
The 27 junior analysts have been promised eight-hour days and weekends off work, which would be less than half the annual work hours their New York and London peers typically clock in on similar schemes. The Málaga crew will also receive around half the normal starting salary of $100,000.
Executives at the U.S.-based bank say they are reacting to shifting generational preferences and complaints about burnout among junior bankers that boiled over during last year’s capital markets boom . A group of young Goldman Sachs analysts caught the world’s attention in March 2021 for a slide show in which they complained of being overworked and disrespectful. Attrition in junior banking programs has increased sharply.
But I’m deeply skeptical of Citi’s solution. Malaga’s experience comes as other major financial institutions push for a return to pre-pandemic work patterns, which typically prioritize face-to-face time and long hours.
JPMorgan, Goldman and Morgan Stanley are pushing staff back into the office five days a week and Goldman has resumed its annual cull of underperforming staff after a pandemic hiatus. Midtown Manhattan is once again crowded, particularly mid-week, and subway ridership is back to two-thirds of pre-pandemic levels. Citi has more than 400 other new analysts around the world who will have to work normal, that is, incredibly long hours, for normal, that is, very high wages.
Citi says Malaga analysts will work on the same deals as their counterparts elsewhere in the bank. They will simply be assigned fewer of them and given compensatory time off if they have to work late or weekends to meet deadlines. Leaders also promise that those who succeed in the two-year program will be offered promotions, including the chance to take on more demanding and better paid roles elsewhere.
“It’s not something that we suddenly released. We listen to what people tell us,” says María Díaz del Río, chief of staff of the Citi unit that manages the program. “The industry is trying to change the culture, but the new generations are going further.”
However, Malaga analysts could easily end up on a mixed version of the 1980s and 1990s “mommy track”, which hijacked the careers of many women who wanted to balance parenthood with demanding jobs. Highly educated women who reduced their working hours suffered lasting damage to their long-term earnings compared to their male colleagues. (A 2010 article estimated the gap at 24% after 10 years.) They also missed opportunities for promotion, leaving them with the choice of dead-end jobs or leaving.
Sexism was part of it, but even well-meaning banks, consultancies and law firms struggled to offer trailblazing mothers gateways into the traditional high-speed career path. Most financial institutions still struggle to retain and promote mid-career women, and lawsuits for discrimination against mothers persist. US law firm Morrison & Foerster settled one in March.
Likewise, despite periodic promises of reform, the seven-day workweek remains standard in investment banking. Young recruits may want something different, but a small resort program isn’t going to change bosses’ expectations overnight. Participants risk the resentment of their colleagues as well as being permanently stigmatized as unserious.
To be fair, Citi is probably the most likely Wall Street bank to succeed with such a flexible working program. Chief executive Jane Fraser, the first woman to lead one of America’s giants, has personal experience of non-traditional work. She went part-time to consulting firm McKinsey when her children were small. She also called the pandemic recovery period a “unique opportunity for businesses to redefine their workplaces.”
Díaz del Río believes Málaga is the start of a broader cultural shift. “I think London, Frankfurt and Madrid are going to get closer to Málaga than Málaga will get to them,” she said.
This may be the wave of Gen Z’s future. But Goldman received record applications for its much tougher entry-level jobs last year, and UK bankers hailed the newcomer’s plan. government aiming to lift the cap on bonuses, as this will allow them to squeeze wages while rewarding high-flyers. With investment banking fees falling and a recession looming, the pressure on juniors to prove their worth will only grow.
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