HSBC has become the latest big bank to raise starting salaries for its junior staff on Wall Street.
First-year analysts in its investment banking team will be paid $100,000, up from $85,000. The rise was first reported by Financial News, citing people familiar with the matter. It comes after analysts and associates were given a pay rise in May.
The pandemic has been brutal for young investment bankers, working long hours from home during what has been one of the industry’s busiest years. This year a group of juniors at Goldman Sachs moaned about “inhumane” working conditions and “abuse” from senior colleagues. On average, they claimed in the leaked presentation to their bosses, first-year analysts worked 95 hours per week, getting about five hours of sleep each night. “My body physically hurts all the time and mentally I’m in a really dark place,” one respondent said.
With the pandemic forcing a rethink on work-life balances, banks and other well-paid professions such as law firms have reported an exodus of younger staff.
To keep talent, Wall Street banks have thrown money at the problem. JP Morgan was the first to lift pay for twentysomething first-year analysts to $100,000 in June, since when most of its rivals have followed. Goldman Sachs, Citi, Morgan Stanley and Deutsche Bank are among those boosting salaries to secure talent. Smaller, independent firms are said to have raised their starting pay even higher.
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Banks are also trying to move away from the industry’s work-until-you-drop culture, with firms promising to reduce hours, especially at weekends. However, Xavier Rolet, the former boss of the London Stock Exchange Group who used to work at Goldman, recently told young investment bankers to “do something else” if they didn’t like their jobs, for which they “are paid very well”.
