It's easier to work on the buy-side in a pandemic
This week has seen the continued exit of senior staff from banks like Goldman Sachs, typically for roles on the buy-side.
I can't say that I blame them.
Some of these departures may have been a reaction to David Solomon's new team, direction, or management style. Fair enough. It takes some time for everyone to understand what a new CEO and the adjacent team means for an individual's day-to-day work, compensation, and career path. Solomon has been in charge at Goldman for sufficient time now for people to get the measure of his leadership.
I suspect that it's not coincidental, though, that many of those exiting are leaving for jobs in smaller organizations, predominantly on the buy-side (hedge funds, private equity, family offices).
When you're senior in your career, and especially when you're senior in your career during a pandemic there are big advantages to working for a smaller firm. A smaller number of colleagues means fewer Zoom meetings. It also mitigates the need to impress "internal clients" - there are simply fewer of them in a hedge fund or family office. There's also less need to placate dozens or hundreds of external clients, while trying to please the C-suite with evidence of market share gains.
The buy-side is a simpler life. And over a year into a pandemic, a simple life is more appealing than ever.
At the same time, big banks face the difficulty of adapting to the new culture of working from home, and the apparent militancy of today's juniors. Banks switched to home working with impressive speed at the start of the pandemic, but working from home is not a sustainable model, given the habits of training, mentoring, collaboration and supervision that have built up on Wall Street for 200 years.
If "work from home" becomes the standard for 75% or more of the Wall Street work force, a massive set of practices and traditions will have to change.
Few if any of the people at the most senior levels of these firms want that or even have a clue about how to go about the reorganization and re-training. Almost certainly not the existing C-suite who are steeped in the old ways.
This makes it interesting that so many Goldman Sachs partners, probably the class of Wall Street workers who have the biggest set of career options and the greatest financial flexibility, are choosing to exit 200 West Street one final time. They'll be back for the annual retired partners' dinners, and will undoubtedly have much to discuss.
Theo Lowe is a pseudonym of a banker in New York City
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