Millennial Employees Confound Big Banks

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"Millennial Employees Confound Big Banks To stem departures, firms tweak their delayed-gratification models

- Daniel Huang

At Goldman Sachs, “Managing Millennials” has been one of the most popular training sessions for years. Limiting hours

Beginning last year, the bank began limiting hours for its most junior staff, requiring summer interns to stay away from the office between midnight and 7 a.m. during the week. Chief Executive Lloyd Blankfein’s daughter, a senior at Harvard, interned with the bank last summer.

Goldman and other banks have retooled their analyst programs, including new measures to outsource grunt work and invest in timesaving technology.

Credit Suisse Group AG has begun putting early-career bankers in front of clients soon after hiring—something that might have taken years in another era on Wall Street.

The Swiss bank also appointed a program director to coach senior bankers on communicating with young staffers, providing tips such as “don’t lean on hierarchy,” says Amy Hudson, chief operating officer of the firm’s investment bank and capital-markets division. The appointee, Nancy Nightingale, is a “total mom figure,” says one third-year analyst. She recently helped shepherd an effort to get bosses to send personal emails highlighting junior bankers’ individual achievements.

“The things that [young workers] want are frankly the things that all of us always wanted,” says Ms. Hudson. But today’s junior bankers, she says, are “more confident about expressing it in the workplace.”

That dynamic isn’t unique to finance. Only 28% of millennials feel their current employer is making full use of their skills, according to a survey by Deloitte & Touche LLP. On Wall Street, however, paying one’s dues has long been part of the culture.

Michelle Wu discovered that fact six months into her job as a credit analyst at Goldman Sachs when she sought a transfer to another group to learn new skills. Her team mentors turned her down, she says. “Their responses were, ‘Keep your head down’ and ‘Focus on your work,’ ” she recalls. Goldman declined to comment on specific employees.

In December 2014, after less than a year at Goldman, she accepted a job on Google’s small-business team and moved to California. Despite working more than 100 hours a week—about the same as her job at the bank—Ms. Wu says she feels more energized. When she told her boss about an opportunity to increase revenue, she says, he told her to “run with it.”

Wall Street’s postcrisis landscape has been reshaped by job cuts and reduced risk-taking, and pay packages don’t tip the scales like they used to.

At three elite business schools—Harvard University, Stanford University and University of Pennsylvania’s Wharton School—M.B.A. graduates who accepted jobs in investment banking or trading had a first-year base salary of $125,000, on average, similar to those who join technology companies, and less than the roughly $150,000 base at other Wall Street firms such as hedge funds and private-equity firms, according to the schools.

Surveys show that young people who came of age during the economic downturn are less trusting of the financial sector in general, and more eager to find jobs that they believe serve a social good. A 2014 Brookings Institution report concluded that millennials are likely to “find an outlet for their desire to change the world for the better somewhere other than on Wall Street.”

Some veteran executives say banks should do a better job of explaining how helping clients raise capital and manage their financial risks is good for society.

Citigroup announced in March a program to allow incoming analysts to spend a year at nonprofits before beginning their banking careers. Citigroup will pay them 60% of their starting salary during that time. Nine recruits already have signed on.

The bank also introduced a program for young bankers to travel to Kenya for a four-week microfinance project, mirroring an initiative launched by Moelis earlier in the year. Moelis employees who have been with the firm for at least five years are entitled to a four-week paid sabbatical program, a spokeswoman said.

Some young Wall Street bankers say initiatives to reduce long hours, however well-intentioned, are having unintended consequences. Analysts at Goldman Sachs, J.P. Morgan and other banks say mandatory days off have made it tough to spread out workloads, ramping up pressure when they are in the office. Analysts in a few Goldman groups say capping intern hours has undermined team dynamics and created tensions over division of work.

Some bankers are baffled by the attitude of their more junior colleagues. There is a pain point among midlevel bankers who “can sometimes get frustrated if the younger analyst isn’t as available as they want them to be,” says Mr. Waldron, Goldman’s investment banking co-head.

Nevertheless, he says, “just because other people worked 80 to 100 hours [each week] in their life history doesn’t mean these people should.”"