It sounds like great work if you can get it. Citigroup has opened a new hub for junior investment bankers in Málaga, a Spanish city known better for beaches than finance.
The 27 entry-level analysts have been promised eight-hour days and work-free weekends, which would add up to less than half the annual working hours that their peers in New York and London customarily log in similar programmes. The Málaga crew will also be paid roughly half the normal $100,000 starting salary.
Executives at the US-based bank say they are responding to changing generational preferences and complaints about junior banker burnout that boiled over during last year’s booming capital markets. A group of young Goldman Sachs analysts drew global attention in March 2021 for a slide deck in which they complained about being overworked and disrespected. Attrition in junior banking programmes has risen sharply.
But I am deeply dubious about Citi’s solution. The Málaga experiment comes as other big financial institutions are pressing for a return to pre-pandemic working patterns, which usually put a premium on face time and long hours.
JPMorgan, Goldman and Morgan Stanley are pushing staff to come back to the office five days a week and Goldman has resumed its annual cull of low performing staff after a pandemic hiatus. Midtown Manhattan is once again crowded, particularly midweek, and subway ridership is back to two-thirds of pre-pandemic levels. Citi has more than 400 other new analysts worldwide who will be expected to put in normal, which is to say insanely long, hours for normal — ie very high — salaries.
Citi says that the Málaga analysts will work on the same transactions as their counterparts elsewhere in the bank. They will just be assigned to fewer of them and given compensatory time off if they have to work late or on weekends to meet deadlines. Executives also promise that those who thrive in the two-year programme will be offered promotions, including the option to take on more demanding, higher-paying roles elsewhere.
“This is not something we have suddenly come out with. We are listening to what people are telling us,” says María Díaz del Río, chief of staff for the Citi unit that is running the programme. “The industry is trying to change the culture, but the new generations are going further.”
However, the Málaga analysts could easily find themselves on a co-ed version of the 1980s and 1990s “mommy track”, which sidetracked the careers of many women who wanted to balance parenting with demanding jobs. Highly educated women who reduced their hours suffered lasting harm to their long-term earnings relative to male colleagues. (A 2010 paper put the gap at 24 per cent after 10 years.) They also missed promotion opportunities, leaving them a choice between dead-end jobs or departure.
Sexism was part of it but even well-meaning banks, consultancies and law firms found it hard to offer the pioneering mothers on and off ramps to the traditional high-speed career path. Most financial institutions still struggle to retain and promote mid-career women and mommy track discrimination lawsuits persist. US law firm Morrison & Foerster settled one in March.
Similarly despite periodic promises of reform, seven-day work weeks remain normal in investment banking. Younger recruits may want something different, but a tiny beach resort programme is not going to change bosses’ expectations overnight. Participants risk resentment from co-workers as well as being permanently stigmatised as unserious.
To be fair, Citi is probably the Wall Street bank most likely to make such a flexible working programme succeed. Chief executive Jane Fraser, the first woman to run one of the US giants, has personal experience with non-traditional working. She went part-time at consulting firm McKinsey when her children were small. She has also called the pandemic recovery period a “once-in-a-generation opportunity for companies to redefine their workplaces”.
Díaz del Río believes Málaga is the beginning of a wider cultural shift. “I think London, Frankfurt and Madrid are going to get closer to Málaga than Málaga will get to them,” she says.
Maybe this is the wave of the Gen Z future. But Goldman received record applications for its much harder core entry-level jobs last year, and UK bankers have praised the new government’s plan to lift the cap on bonuses because it will allow them to compress salaries while rewarding high-flyers. With investment banking fees falling and a recession in the offing, the pressure on juniors to prove their worth will only grow.