By Suman Varandani -
Goldman Sachs Group Inc (N:GS) unveiled Thursday new initiatives aimed at retaining junior bankers, including faster promotions and encouraging mobility within the firm. The move reportedly comes as companies across a range of industries have faced desertion by junior employees.
As part of the new initiative, the bank has promised to speed up promotions for analysts to associates after their second year, with an increase in compensation. It will also eliminate some of the grunt work that is often passed on to younger employees by their seniors. After staying on board for 2 years, junior bankers will for the first time be guaranteed a rotation to another business division, the New York firm reportedly said.
“We hire a lot of young people,” David Solomon, co-head of Goldman’s investment banking division, said in an interview, according to the Wall Street Journal. “We don’t need 100% of them to decide they want to spend their whole careers at Goldman Sachs … we need a percentage of them to.”
Goldman Sachs, which hires about 2,000 new analysts each year, said that it would increase salaries for first-year analysts in the U.S. by about 20 percent, to $85,000 from $70,000, which will not be inclusive of bonuses, according to the New York Times.
“The goal of all of it is to make sure we hire the best people available to the firm and that we retain those people,” Solomon reportedly said. “It all speaks to what I say at the highest level for a continued need for us to be very thoughtful about how we manage human capital, train them, provide learning experience and how we’re transparent about their career trajectories and opportunities they have.”
Solomon also reportedly said that since the time Goldman Sachs started focusing more on keeping younger bankers happy, there have been “tangible results” in retaining people.
“We’re trying to evolve from a culture where more information that’s generic is better, to less information that actually is value-added and relevant,” Solomon said. “That’s a big cultural shift, and clients prefer it.”
The April death of a 22-year-old Wharton graduate working as a tech banker for Goldman Sachs in San Francisco fueled a debate over the extremely tiring demands put on young workers. Several firms have worked on policies to limit hours of junior bankers in recent years, also prompted by the 2013 death of a Bank of America Corp (N:BAC). intern.
"Despite the ebbs and flows, ups and downs, there are still a lot of people who are interested in working at Goldman Sachs," Solomon said Thursday, according to Reuters. "But in the competitive world that we live in, it's important that we don't take that for granted for one minute and that we're constantly in a position to make sure we're doing all the things we need to do to be as competitive as we can be."