Nathan Sykes

April 1, 2021

Goldman Sachs Has A People Problem

Goldman Sachs is in some hot water! Did y'all see that survey that leaked a few weeks ago? It describes 'inhumane working conditions' and horrible employee morale among analysts at the company. Among the statistics collected, analysts shared that they work an average of 98 hours per week, and sleep an average of five hours per night. The analysts rated their mental health as a 2.8 and their physical well-being as a 2.1, compared with 8.8 and 9.0 (on a scale of ten) before they started working for Goldman.

Not to worry, though. David Solomon, their CEO, said, "I hear you - and here's a snack basket to show our appreciation. Now get back to work, sucker." (I should clarify that's a joke, he didn't actually say that. But the company did send junior bankers snack baskets while team members at rival firms receive Apple products and Pelotons.)

If I might bump in - perhaps a third option would be to not have your associated work 100 hours per week? Why don't we meet slightly below the middle at 40? Or even 32 hours per week?

It is true that I'm not David Solomon, and my associates are not working hard to buy me a fourth beach house or second jet or whatever people worth $100 million spend their money on. And maybe I'm just crazy, or not "dedicated" enough to corporate finance, but I don't think that spending 80 or 90, or even 100 hours per week in any capacity is worth the amount of money these associates are getting paid. It doesn't matter if the paycheck is $500,000. It's not worth it.


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I believe that there are two options to combat this issue. Option one is to just reduce the size and scope of whatever you're working on. The same techniques that Jason and David perfect in Getting Real applies as much to corporate finance as it does to software development. Take the scope down a few notches, and the deals get less hairy and complex. Bring the deal size down, the complexity of your due diligence lessens and you can spend less time on a deal before bringing it to close. That's the path that I like to take with my work over at Howdy Interactive - keep it small, keep it simple, and cash in on the small, simple wins.

For a bank like Goldman Sachs, that's obviously not an option. I wish it could be, but they need to go occupy themselves with all sorts of large-scale nonsense. Fine. Somebody has to do it. The second option to combat this issue is outsourcing. I talk about it a lot in HEY World, having written 5ish posts in the past on how to effectively leverage outsourcing, automation, and systemization to your advantage. In an environment like Goldman Sachs, they employ the hub and spoke system very effectively. The managing partner or the board of directors (or whoever's in power, I'm not familiar with their corporate hierarchy) is the hub, and everyone downward are the spokes. They take care of the day to day stuff.

What goes unsaid is that associates, principles, and vice presidents can be hubs, too. The work that's assigned to them can easily be outsourced to firms in India, the Philippines, and Pakistan for $5-10/hr. With the size and resources of Goldman Sachs, they can easily expand a similar in-house operation that allows them to place strict confidentiality guidelines in place. There are plenty of project management professionals in these countries to allow associates, analysts, and principals to just outsource the individual tasks that are causing these folks to experience such a deep decline in morale.

They'd still be accountable for the tasks being completed, but wouldn't it be a better option than allowing associates to live the way they currently are?