This week Goldman Sachs sent budding twentysomething financiers a message: Think before starting your career here. As a recent college graduate, I'd like to offer Goldman my thanks.
Actually the message wasn't quite so blunt. As first reported yesterday by the Wall Street Journal, Goldman will no longer offer two-year contracts to analysts hired straight out of college into the investment-banking and investment-management divisions and will put new conditions on bonuses formerly paid at the end of the two-year program. According to the Journal, the change came "after executives grew frustrated that many graduates weren't staying with the firm after completing the two years, and after Goldman fired a handful of analysts over the past year for signing on to work at other financial companies in violation of their contracts."
It's not surprising to me that Goldman is having trouble retaining the best and the brightest. Yes, there is the general disenchantment with the finance world over the last few tumultuous years, the late nights spent in cubicles with Excel spreadsheets and takeout Chinese, and the reduced bonuses (although the annual salary, at $70,000 to $80,000, is enough keep food on the table of a modest New York apartment).
But I suspect a major reason more trainees were leaving is that they weren't there for the right reasons in the first place: Many of my peers went into banking and consulting because they didn't know what else to do.
Last fall, my late friend and Yale classmate Marina Keegan decried the trend in the New York Times and Yale Daily News. Noting that about a quarter of employed Yale graduates enter consulting or finance jobs, she wrote in the Times:
We will work for banks and hedge funds because they’re marketed to us (quite strategically) as something to merely do for a few years — as a perfect way to gain skills for a future career in somehow saving the world. ... I’m just not convinced that the most productive use of 25 percent of my graduating class’s time is to spend two or three years pushing figures around spreadsheets to make more money for those with the most money.
My worries aren't quite so cosmic. Many of my peers have gone into analyst positions -- in which they are technically employed "at will" but expect to be at their firms for at least two years -- because they need to make money and pay off debt. Others have carefully thought out their career aspirations and recognize that a few years of consulting or banking experience will serve them down the road. Still others really do want careers in finance, and have been delighted by their first weeks in firms at which they could see themselves working for the rest of their lives.
What worries me is the indecisiveness that underlies a decision to go to work for Wall Street. I know too many people who used these two-year programs as crutches. When you're left, after four years of high school and four years of college, with the cliched vast plain that is the rest of your life, an offer of another two years of structured training -- this time with pay! -- is a godsend.
For these graduates, Goldman's change may just be the wake-up call they need. I only hope other banking and consulting firms follow suit. By making programs more open-ended, they may force graduates to see them as what they really are: not one last deferment from "real life," but rather a first job.
(Zara Kessler is an assistant editor and producer for Bloomberg View. Follow her on Twitter.)
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