Unlimited vacation time at Goldman Sachs – not anytime soon

Senior employees of the investment bank should be able to take as many vacations as they want. That sounds good, but in the end it’s the customer’s success that counts – and suddenly things look different.

Investment bank Goldman Sachs executives are getting more freedom. The fact that the bank apparently also wants to move into West Palm Beach (Florida) has nothing to do with the new holiday regulations.

Eva Marie Uzcategui / Bloomberg

On Wall Street, investment bankers make good money when times are good, but working conditions are often harsh. We are talking about a “greenhouse culture” that can be dangerously overwhelming, especially for ambitious young employees.

Years ago, for example, the news caused a sensation that a Merrill Lynch intern died after working 72 hours straight. The young bankers at Goldman Sachs are still complaining about the heavy workload, physical and psychological problems and hardly having time to eat or take a shower, and they propose capping the working week at 80 hours.

Any length of vacation?

The latest news, according to which the Wall Street bank will in future give its executives the opportunity to go on vacation as long as they like, may be all the more astonishing. Partners and managing directors can take leave if necessary “without having a fixed entitlement,” according to a memo from the company, which was quoted by the Bloomberg news agency. Caps will still apply to junior staff, but they will be given at least two additional days off per year and will be encouraged to actually take them from next year.

Boom: Compensation and Benefits at Goldman Sachs

in billions of dollars

That may sound good and as progressive as Netflix or Linkedin, but at about the same time the bank eliminated free breakfast and free lunches in the office, which were intended to lure workers away from the home office and back into the workplace – and the fundamental skepticism is not long in coming.

“The truth is that once you’re a director, vacation time doesn’t really count – you can take as much vacation time as you want. The bosses won’t interfere, instead they’ll keep chasing customers around the triangle. In fact, you can perhaps fly to the Maldives with your wife for two weeks, but you still have to take care of your business, otherwise your personal profit and loss account will suffer and, in the worst case, your bonus will be at risk,” explains an anonymous employee the dilemma.

Passers-by in front of the Goldman Sachs headquarters in New York.

Passers-by in front of the Goldman Sachs headquarters in New York.

Michael Nagle/Bloomberg

So Goldman Sachs may initially create positive headlines and differentiate itself visually from competitors such as HSBC, which closely monitor what their senior executives are up to on a day-to-day basis. However, critics consider the decision to be an image campaign that will not prevail in reality. Their arguments are simple – in the past, only the fewest employees at Goldman Sachs actually redeemed their vacation entitlement. In their eyes, it is unlikely that they “now suddenly storm the beaches en masse.”

Not so fast, because the customer is king

After all, the Goldman customer is king. The employee must always be there for them whenever they need them – even on vacation, they say. If necessary, he is obliged to end the vacation to pay a visit to the client. In investment banking, managers spend a large part of their lives traveling anyway, which can be seen as a kind of vacation in that hotels and flights are part of it.

Anyone who has ever worked in a bank knows that this can only be a public relations stunt. For example, anyone who takes a month’s vacation not only has to expect a massive reduction in their bonus, but also, in case of doubt, their immediate dismissal, explain insiders. Ultimately, everything boils down to bank managers working even more from their hotel rooms in the future.

The recent price boom at Goldman Sachs is over

Exchange rate development in dollars

In fact, Goldman’s senior staff are not as free as recent furlough reports may superficially suggest – and from an employee relations perspective, experts say, they can even be counterproductive. After all, the “lower ranks” not only receive less, but they can no longer transfer their entitlement from the old year to the new year.

competition for labour

The visual modifications at Goldman come at a time when financial institutions are in intense competition for talent in a labor market that has been overheated due to “cryptomania”, which has led to sharp salary increases in the recent past. They are having to pay junior bankers more and more because staff are overworked due to booming business from the glut of cheap money, which has been exacerbated amid the pandemic.

Now some are working on improving the work-life balance. For example, Citigroup recently announced plans for a new investment banking center in the southern Spanish city of Málaga, where junior analysts would work just eight hours a day and where their weekends would be sheltered. In return, however, they receive only about half the starting salary of $100,000 or more that their first-year colleagues in London or New York receive.

All in all, the financial industry seems to be adapting, at least on paper, to the generous regulations in the technology sector in matters relating to holidays and the quality of life of employees. However, organizations like that criticize Chartered Institute of Personnel and Development the “new freedom” because it could ultimately lead to employees taking even fewer vacation days than in the past. “Once you’re a senior at Goldman, you’ll have adapted too much to the internal company culture to use the freedom.”

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