How necessary are the 7am-11pm hours really? Could the banks do just as good of a job if they hired more people who worked 40 hour weeks? (Increased salary costs notwithstanding)
Hiring more people does help but there will still not be 40 hour work weeks. In many instances, some people in the team has built up the knowledge on a particular part of the deal that it is difficult to outsource since it would be much faster for the person to complete the work themselves.
Hiring more people also means that the information is diffused around. If one person working on a deal it means that he knows 100% about the deal. If 100 people is working on the same deal, efficiency would greatly decrease as knowledge management becomes important (lots of emails).
In my short time at a small consulting firm (Management / C level), this was also the case.
Many times my long hours were due to "deliverables" (PowerPoints, documents, etc.) being in a choke point based on an Analyst, Consultant, etc.
E.g., waiting on numbers to finish a presentation.
However, much of the time, their is ALWAYS something to do, and much of it is very much face-time (butts in seats = working).
Why is that the case? Is it just human nature and people are weird and illogical?
It seems to me like if a deal makes business sense at Friday at 11:30 pm, it will still make financial sense next Tuesday at 10:30 am.
http://krugman.blogs.nytimes.com/2014/01/20/three-piece-suit...
But they're there to serve a Higher Purpose: to engender classic, Stockholm Syndrome endearment -- and unquestioned obedience.