Goldman Sachs employs 58% more people now than in 2005. Just how sustainable is this?

If you really wanted a job at Goldman Sachs, 2007 was the year in which to get one.

Back then, in one year alone, headcount at the world's most discussed investment bank, increased by 34%. This followed an 18% increase in 2006.

Plateaued

Since then, headcount at Goldman has remained comparatively static.

It fell 17% in 2008, but rose 20% over the two following years. In the first quarter of 2011, the bank employed 35,400 people - only marginally below the peak of 35,500 in 2007.

Yet Goldman Sachs today still employs 58% more people than it did in 2005. Not all rival banks offer comparative figures dating back that far, but those that do register a far slower rate of headcount growth. At Credit Suisse's investment bank headcount is up only 10% over the same period. At UBS's, it's down 3%.

Growth markets

Much of Goldman's hiring has happened in growth markets. Last year, Lloyd Blankfein said growth market headcount had increased at a CAGR of 33% since 2003, versus a business average of 7%.

Is all this additional headcount sustainable? The simple answer seems to be yes: in 2005 profit per head at Goldman was $277k. Assuming all quarters this year are like the first (a possibly optimistic assumption), profit per head at Goldman Sachs in 2011 should reach $306k.

The more complex answer is that Goldman Sachs has expanded massively and far faster than its competitors since 2005. In the light of the headwinds it now faces, this could give cause for concern - if you're the worrying kind.