Guest comment: Analysts should analyse where they stand

Life is good for junior bankers, says Chris Sevenoaks at Finance Professionals City. But now may be the time to question how long it can last.

Four years is a short time in banking. Back in 2004 investment banking analysts were glad to have a job. Nowadays they're asking whether they really need to work the nightshift, and - even more surprisingly - banks are saying "OK, we'll let you off."

Last month, for example, we heard of one major US bank running a session on work/life balance for analysts. Not long ago work/life balance meant having a job! Junior bankers either put up with the long hours or shut up. But the shortage of experienced junior staff has put the ball back in juniors' court and they're playing it for all they're worth.

At some point, however, banks will regain the upper hand. It's an obvious thing to say, but the role of an analyst is to examine, comment, and ultimately to act upon one's findings. Bearing that in mind, it's not outrageous to suggest junior bankers might (just might) be well served using those skills to scrutinise their own careers and positions.

Analysts' current happy state is the result of fortuitous circumstances. A booming M&A market and inadequate hiring back in the doldrums of 2003 mean both fledgling and experienced analysts are riding the crest of an exhilarating wave - they are in high demand, well paid, challenged in their work and safe and satisfied in the knowledge that, should they so choose, they can alert the market to their availability and watch the resultant clamour for their services with pride and no little enjoyment. The life of the analyst is a good one.

But if one casts one's mind back a little further, to the heady days of 1997, we see a warning from history. Aside from the raucous optimism of Mr Blair's ascent to Number 10, the world of the analyst then was interestingly similar to that now - money was plentiful, promotions were rapid and decisive, and 'work/life balance' was a bargaining chip as opposed to an industry joke. As with the advent of New Labour, everything in the garden appeared to be particularly rosy, and the very notion of needing a 'Plan B' in the event of anything untoward or unexpected happening was soundly mocked.

We all know what happened next.

Of course, the analyst cannot realistically be expected to be able to predict the future with startling accuracy, but training, experience and an occasional glance at previous events can often be highly instructive. The graduates of 10 years ago realised, with something of a shock, that when a downturn occurs, only the very best survive. And even they, quite often, find themselves in a position whereby they have to be content with the job they have rather than being able to dictate exactly which job they want.

For how much longer will the current delightful scenario continue? Far from being a salutary warning of an impending market turn, the suggestion here is that analysts ought to consider applying their skills to their own situation. Whilst it is, of course, intellectually intoxicating to be thoroughly absorbed in one's work, it's a slightly risky strategy to adopt. Putting pitchbooks and deal execution aside, it's worth looking at the wider picture - what causes and generates supply and demand for banking juniors, what dictates remuneration levels and, not least, what is the likelihood that complacency may lead to disillusionment and a rather nasty surprise the next time you poke your head outside the boiler room to have a look at what the job market is doing?

In 1997, we were told that things could only get better. And, for a while, they did. Optimism is a wonderful thing but, as our soon to be ex-Prime Minister will readily attest, it's not easy to hang on for dear life in any job for 10 years. In the final analysis, you need a Plan B.