It sounds like great work if you can get it. Citigroup has opened a new center for junior investment bankers in Malaga, a Spanish city better known for beaches than finance.
The 27 entry-level analysts were promised eight-hour days and weekends off, which would account for less than half the annual hours their colleagues in New York and London typically commit to similar programs. The Málaga crew will also receive approximately half the normal starting salary of $100,000.
Executives at the US-based bank say they are responding to changing generational preferences and complaints of junior banker burnout, which boiled over during last year’s booming capital markets. A group of young analysts from Goldman Sachs drew global attention in March 2021 for a slide deck complaining of overwork and disregard. Turnover in junior banking programs has risen sharply.
But I have deep doubts about Citi’s solution. The Malaga experiment is taking place while other major financial institutions are pushing for a return to pre-pandemic work patterns, which usually place a high value on attendance and long hours.
JPMorgan, Goldman and Morgan Stanley are urging employees to return to the office five days a week, and Goldman has resumed its annual selection of underperforming employees after a pandemic hiatus. Midtown Manhattan is once again crowded, particularly during the week, and subway ridership has fallen back to two-thirds of pre-pandemic levels. Citi has more than 400 other new analysts worldwide who are expected to work normal, ie insanely long, hours for normal – ie very high – salaries.
Citi says Malaga analysts will be working on the same transactions as their counterparts elsewhere at the bank. You will only be assigned fewer of them and will be given time off in lieu if they have to work late or weekends to meet deadlines. Executives also promise that those who succeed in the two-year program will be offered promotions, including the option to take on more challenging, better-paying roles elsewhere.
“It’s not something we suddenly put out. We listen to what people tell us,” says María Díaz del Río, chief of staff for the Citi unit that runs the program. “The industry is trying to change the culture, but the new generations are going further.”
However, the Malaga analysts could easily find themselves on a mixed version of the 1980s and 1990s “mommy track” that distracted the careers of many women trying to balance parenthood with demanding jobs. Highly qualified women who reduced their working hours suffered significantly in terms of their long-term income compared to their male counterparts. (A 2010 study put the gap at 24 percent after 10 years.) They were also missing out on promotion opportunities, leaving them with a choice of dead-end jobs or leaving.
Sexism was part of it, but even well-meaning banks, consulting firms, and law firms struggled to offer pioneering moms the traditional high-speed career path on and off the ramp. Most financial institutions are still struggling to retain and advance women in mid-career, and mother-hunting discrimination lawsuits persist. US law firm Morrison & Foerster settled one in March.
In investment banking too, the seven-day week is still the norm, despite regular promises of reform. Younger recruits might want something different, but a tiny beach resort program isn’t going to change bosses’ expectations overnight. The participants risk resentment from colleagues and are permanently stigmatized as dubious.
To be fair, Citi is probably the Wall Street bank most likely to make such a flexible work program a success. Chief Executive Jane Fraser, the first woman to head one of the US giants, has personal experience of non-traditional ways of working. When her children were young, she went to consulting firm McKinsey part-time. She has also described the recovery phase of the pandemic as “a golden opportunity for companies to redefine their jobs”.
Díaz del Río believes that Malaga is the beginning of a broader cultural change. “I think London, Frankfurt and Madrid will be closer to Malaga than Malaga to them,” she says.
Maybe this is the wave of the Gen Z future. But Goldman received record applications for its much more difficult entry-level jobs last year, and British bankers have hailed the new government’s plan to remove the cap on bonuses because it will allow them to cut salaries and reward high achievers. With investment banking fees falling and a recession looming, the pressure on juniors to prove themselves will only increase.
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