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Banks Swapped for Startups: Graduates Crave Freedom

 

Banks Swapped for Startups Graduates Crave Freedom

Fresh out of university, Yuelin Li secured a job as an analyst at JPMorgan in its Equity Sales department before becoming an associate in Credit Research. A stable, well-paid job, Li was in an enviable position given that one in four young people in the EU are unemployed.

However, after just three years, Li decided to leave the firm and co-found Seeqnce Alice, a virtual accelerator that supports the development of startups across Europe, the Middle East and North Africa, by bringing together startups, investors, mentors and institutions on a single platform.

Li said that working at JPMorgan provided a foundation for her next career move as it enhanced her experience of the finance, business and corporate world. “However, there isn’t a lot of constructive innovation and creativity in the industry right now, and it feels like everyone just wants to retain the status quo,” Li said via email.

“This makes it not a very exciting place for ambitious and driven graduates who want to make a positive impact on the world.”

Li’s move to the tech sector is indicative of changing attitudes among young graduates towards financial services as a result of the work ethos of the industry as well as the allure of more modern and exciting alternatives. And banks are taking notice.

On Tuesday, Credit Suisse announced new working guidelines for its young bankers. The Financial Times reported the bank as saying they should not work on Saturdays unless they were working on a “live” deal.

Credit Suisse is not the first firm to take a different stance to the working day for young recruits. Other large banks like Bank of America, Goldman Sachs and JPMorgan have taken steps to improve conditions.

“In the entrepreneurial world you are blazing new paths, building products and facing a wide range of challenges you haven’t seen before every day…The level of positive energy and intensity is not really comparable to my experiences in finance,” Li said.

Credit Suisse’s new measures include avoiding arranging conference calls for non-live projects on Saturdays and asking junior bankers to alert their bosses if they were working after midnight on a Sunday on a deal or pitch. It appears that the financial services sector is aiming to maintain the allure of the industry as places like Google, Facebook and other tech companies grow not just in dominance but also in terms of a fun, cool work environment and ethos.

The working schedule of some within the financial services sector came into focus in August after 21-year-old Moritz Erhardt died at his home in Bethnal Green in London while part of the internship program at Bank of America Merrill Lynch’s (BofA) investment banking division.

The widespread culture of long working hours and all-nighters for banking interns was criticized after the death, with recruiters and human resources groups calling for changes to guidelines and working practices.

Li’s attack on the lack of “positive energy” at JPMorgan was countered by the firm. A source at JPMorgan emphasized to CNBC over the phone the changes the company has recently made to its approach to younger workers. Last year, the firm announced that it would be increasing the number of junior investment bankers it employs by roughly 10 percent, thus spreading out the overall workload, as well as providing them with “protected weekends” so as to reduce working overtime.

The source did not provide any official comment regarding Li’s thoughts on her time at JPMorgan, but did stress that the company still received tens of thousands of applications across Europe and the firm has not seen a drop in interest.

Still, Julie Stanbridge, the head of student recruitment at Ernst & Young, said that flexible working hours were now key for attracting young graduates. “Like many firms, we are also finding that graduates are expecting more virtual working, collaboration and flexibility,” she wrote via email. “At Ernst & Young, we actively promote our flexible working policies to ensure all our people, both interns and full-time employees, have options over when, where and how they work.”

According to a report released this past Monday, major employers plan to recruit around 1,200 extra U.K. graduates this year, sending recruitment in the country to a seven-year high.

This could be a decisive year for graduate recruitment in the financial sector. Following a survey of 100 leading public and private and non-governmental organizations, High Fliers Research found that graduate recruitment would rise by 8.7 percent in 2014, the biggest annual gain in four years. Companies surveyed include FTSE 100 and Dow mainstays such as General Electric, Microsoft, BAE Systems and Tesco, as well as JPMorgan. Will they be able to compete with their equally keen competitors?

Or, more importantly, would Li have stayed in the industry if JPMorgan had changed her working hours? Li said she was averaging 60 to 65 hours a week.

“Probably not,” she said on hearing the news of Credit Suisse’s changes. “Not having to work on a Saturday just implies that you will never get a Sunday. Given that the rewards from banking are shifting substantially, the whole culture and structure of the industry will have to change to retain the best juniors.”

Reprinted by permission.

Image Credit: CC by Fabrizio Van Marciano

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About the author: Kiran Moodley

Kiran Moodley is an Assistant Producer for CNBC in London. Previously, he worked for PBS NewsHour in Washington, D.C., and British GQ in London. He has also written for The Daily Beast, The Atlantic and The New Statesman. He holds a BA in History from Clare College, Cambridge, and a MS in Journalism from the Columbia University Graduate School of Journalism.

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