How are people responding to the pay raise after Goldman Sachs’ 95-hour workweek complaint?
All of the respondents in the survey said that the job had negatively affected their personal relationships, while 77% said they had been victims of workplace abuse.
Who is Goldman Sachs again?
- Goldman Sachs Group Inc. is one of the largest banks in the world that primarily deals in investment and asset management.
- This means that the bank pretty much just focuses on investing in other companies and managing the companies that they invest in.
- Much like the Deutsche Bank, Goldman Sachs is considered a systematically important bank, and it was one of the banks that was involved in the subprime mortgage disaster that led to the housing market crash back in 2007.
- Led by David Solomon, Goldman Sachs has over US$44.6 billion of revenue, and it has over 40,000 employees.
- Recently, some of those employees, specifically the junior bankers, were notified that they would be getting a pay increase.
What is the pay rate change?
- So first-year bankers at Goldman Sachs typically start out at $US86,000 a year which is more than double the United States national average salary of about US$35,000 a year.
- First-year bankers at Goldman Sachs can now expect to receive US$110,000 a year upon entering into the company. But, there is a bit of a catch behind working there.
- While this may seem like an amazing bonus, this salary increase came after the new bankers started submitting complaints about the incredibly long working hours they have to face with the company.
- Bankers have reported that they have repeatedly been working 95-hour work weeks, which is also more than double the US national average 40-hour workweek.
- Whether or not the increased pay is directly related to the complaints has not been stated by the company, but the complaints from employees are a look at the working conditions for young bankers.
What are the complaints?
- An internal survey from the company began circulating around the web back in March which showed that 13 employees averaged about 95 hours of work a week and slept only five hours a night.
- These junior bankers were not happy with their conditions, and one respondent was especially harsh regarding the treatment they were receiving at Goldman Sachs.
- “The sleep deprivation, the treatment by senior bankers, the mental and physical stress … I’ve been through foster care and this is arguably worse," one respondent said in the survey.
- All of the respondents in the survey said that the job had negatively affected their personal relationships, while 77% said they had been victims of workplace abuse.
- “We recognize that our people are very busy, because business is strong and volumes are at historic levels,” Goldman said in a statement back in March. “A year into Covid, people are understandably quite stretched, and that’s why we are listening to their concerns and taking multiple steps to address them.”
How are people responding to the pay change?
- Well, some people aren’t so supportive of the young bankers’ complaints such as a former Goldman Sachs employee and the former chief executive officer of the London Stock Exchange Group, Xavier Rolet.
- In a LinkedIn post, Rolet says that the banks should hire “poor hungry kids who managed to put themselves through college" instead of “entitled" graduates.
- “We’d work the whole New York trading day in the office, have dinner on the desk then trade Asia and Tokyo from 8:00pm until 10:00pm, go home during the half-day recess and trade the Tokyo afternoon session from home from 12:00pm to 2:00am,” says Rolet. “Grab some shut-eye until 4:00am to put our orders in the European markets in time for the opening.
- Rolet’s description of a standard working day does not sound appealing to the majority of people, and Independent’s chief business commentator James Moore voiced his criticism of Rolet’s stance.
- “It doesn’t matter how much the job pays,” writes Moore. “Abuse is always wrong wherever it occurs.”
- Some also say that the raise will actually hurt the situation rather than help it. In the Financial Times, Hans TW Frankort, reader in Strategy, Cass Business School said that with the pay boost, employers may feel justified to put even more pressure on juniors later.
What comes next?
- Goldman Sachs has yet to comment on the pay raise, and they still have not indicated whether or not the pay raise has anything to do with the working conditions of the junior bankers.
- Overall, the bank is doing incredibly well, and the bank announced today that they expect the S&P 500 to end out the year at US$4,700, which is well above their initial estimates of US$4,300.
- The S&P 500 is a stock market index that tracks 500 of the largest companies listed on stock exchanges in the United States.
- Basically, Goldman Sachs is saying that they expect significant profits across the economy, but they also noted that this path would not be an easy one.
- “The path to our year-end target is unlikely to be a smooth one," said David Kostin, Goldman Sachs chief U.S. equity strategist. “The path of the virus and its economic impact have proven difficult to predict."
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