Does Goldman Sachs now pay its tech juniors more per hour than its bankers? Looks like it
If you want to earn good money in an investment bank and to have a life, you might want to work in an investment bank's technology division. As banks try to hire and retain thousands of STEM students, tech teams suddenly offer a very appealing effort to reward ratio. Or, Goldman Sachs does, at least.
So suggest new figures for working hours and compensation for 2018 published on the investment banking forum Wall Street Oasis. WSO's sample size isn't huge. Nor is it validated by the banks concerned. As a perspective into new pay practices at investment banks it is, however, "interesting".
Despite attempts by Goldman and other banks to cut juniors' working hours in investment banking divisions (IBD), WSO's figures suggest the reality for banking juniors is still harsh. First year analysts in IBD at Goldman Sachs and Bank of America both said they're working between 75 and 90+ hours every week. Technology jobs in banks look like a doddle by comparison: tech juniors at Goldman in New York and in London both said 45 hour working weeks are the norm.
The upshot is that some first-year technologists at Goldman Sachs now say that they earn more on an hourly basis than first some first-year investment bankers do. WSO's figures suggest that average compensation for a first-year tech analyst at GS is around $78k for 2018. This follows Goldman's decision to increase pay for its entry-level technologists (allegedly to around $100k) last year. By comparison, average compensation for a first-year in investment banking is around $122k.
With tech analysts working around 2,160 hours a year to IBD analysts' 3,960 hours, technologists look a lot better off on an hourly basis.
Of course, this may not last beyond the first year. Pay for front office investment banking jobs famously increases exponentially and junior bankers are likely to earn more than junior technologists from years two and three on. However, it should give students contemplating banking careers pause for thought. Compared to technology, front office IBD jobs already aren't quite as appealing as they used to be, and with banks like Goldman going all out to hire-in STEM students as engineers, technologists in banks are only likely to get paid more in future.
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