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The world’s biggest investment banks are struggling to retain quality talent in a tight job market, with some interns receiving salaries of $16,000 a month. A nationwide labor shortage continues to push industries in search of quality workers, with the financial sector particularly hard hit as it simultaneously faces exceptionally high turnover.
Grueling hours and demanding schedules explain widespread dissatisfaction among young bankers begging for work only 80 hours per week.
As the biggest companies strive to maintain a stable pool of cutting-edge talent, compensation is skyrocketing to new heights. In the past year alone, intern compensation has increased by 37.2% at leading global investment banks, with some earning the equivalent of $200,000 a year.
But it’s not just neighboring banks that Wall Street must battle to attract talent. Traditional suit-and-tie banking firms must now compete with more modern, flexible tech firms that offer an alternative to Wall Street’s famous 100-hour workweek.
Related: Apple is taking major steps to tackle labor shortages
For decades, Wall Street has been the epicenter of bright, eager graduates starting and advancing their careers in the financial industry. Now, with fierce competition and flexible working alternatives, the hustle and bustle of FiDi doesn’t seem quite as glamorous for new talent who might prefer working from home or – dare I say – the West Coast.
Over the past two years, Silicon Valley has become a growing and viable competitor for new talent, with more than half of Glassdoor’s highest-paying internships at tech companies in central California.
And yet, despite competition and changing workplace norms, Wall Street still attracts graduates eager to jump-start their careers. Goldman Sachs received a record number of applications for its summer internship program this year, a substantial 27% increase over last year. The rise could be partly due to higher salaries for entry-level positions, but applications have nonetheless poured in.
Still, the question is not so much whether the talent will stick around for the summer or not, but whether the candidates are here for the long haul. Although Goldman has seen a record influx of job applications, its employees continue to report a toxic and unsustainable work culture – with some citing “harassment” and abuse as reasons for quitting.
Only time will tell, but if Wall Street is serious about competing for top talent, it could take more than a generous paycheck in the long run.
Related: Labor Shortage? Depends on who you ask.