There has been a crisis going on at Goldman Sachs. Of course, Goldman Sachs is one of the best known investment banks in the world with a great brand recognition for excellence. But last week, a powerpoint slide deck was released to the press revealing shocking work conditions at the investment bank. This is an important news story for everyone who works in the financial industry, so I will be breaking it down for you in this video. WATCH NOW
Everyone knows that if you work at Goldman Sachs, you are going to have to work hard. But I think most people who have read about this story in the news have been shocked at the grueling work conditions. I have the slide deck that was leaked to the newspapers. The presentation was prepared by HR and showed that first year analysts work an average of 98hrs per week. Here is a quote in the presentation from one of the analysts. “What is not ok to me is 110-120 hours over the course of a week! The math is simple, that leaves 4 hours a day for eating, sleeping, showering, bathroom and general transition time. This is beyond the level of ‘hard-working’. This is inhumane and abuse.”
The CEO of Goldman Sachs has been quick to respond this week. He released a statement claiming that the leadership team takes the comments very seriously. However, he did not agree to any concrete changes. He simply said the company would “strengthen” the attempt to let people have Saturdays off work and they would hire additional staff.
This is an issue that we need to talk about as financial professionals. Goldman Sachs happens to be in the news, but it is not just them. It is all the investment banks and all the major accounting firms. They all treat their employees this way. They are all working insanely long hours. I have made a lot of videos on this, and my message is always the same. We have the power as a community to define the work week.
These companies make people work insane hours because we let them get away with it. There should not be any question. It is inhumane to require an employee to work 98 hours per week. How is that legal? How is this happening in the United States in 2021? We need to tell our politicians in Washington DC that they need to stop this from happening.
For some historical context, in the United States we have the Fair Labor Standards Act (FLSA) signed in 1938. Before this law was signed, there was no minimum wage, businesses were hiring children, it was normal for people to work 12-14 hour days 7 days a week, and injuries and deaths in factories were common. So keep this in mind. 83 years ago, people felt working 60 hours a week was too much and we passed laws against it. The US passed FLSA protecting children and requiring businesses to pay time and a half for blue collar work over 40 hours per week. So today, we have a portion of the workforce in the US known as “blue collar” workers who are protected. However, white collar workers, which include accountants and finance professionals have no workplace protections under FLSA.
Whenever we talk about worker’s rights, people will argue against it saying businesses need free markets and less regulation. If you watch me, you know I am a big supporter of free markets. But free markets does not mean you cannot have limits. We have all agreed that child labor in sweat shops is bad. That is a limit we have put on the free market.
Another argument you will hear is about young people. I have heard people respond to this news story by talking badly about young people today. People say that young people are snowflakes and just have to toughen up, get a thicker skin, and put in the hours. But I think differently. Maybe we should be listening to our young people. Maybe our young people look at the business world today and see ways we could be running things better. Maybe there are more effective ways to run an investment bank than have your employees work 98 hours per week.
I am speaking from experience here. I have worked some really long hours in my career. Anyone who has worked long hours, if they are honest, they will tell you, your productivity goes down throughout the day. The first eight hours you will be pretty alert, have lots of energy, be able to focus and think clearly. But at some point, you start becoming less effective at your job. If you have been at work for 14 hours, the quality of your work at the end of the day is not the same as it was at the beginning of the day. You start to slow down. You start to make more mistakes. You are not thinking as clearly. So if businesses spent more effort scheduling their people, and hiring more people, the business might even be more productive, because their worn out employees will not be walking around like zombies.
Even if you are not working at these banks, you should really care about this issue, because this affects everyone. The decisions made by the workers at Goldman Sachs impact the rest of the economy. These are important jobs. We need the workers at Goldman Sachs to be making good, thoughtful decisions. If they are working 98 hours per week, how can they possibly make good decisions? They are exhausted. If this is the way things are being run, is it any surprise that our economy is full of problems. We desperately need finance professionals and accountants who are well rested and making good decisions.
What do we do about this? In my videos, I recommend that in the United States we change FLSA laws to cover all workers. Anyone who works over 40 hours in a week, should be paid time and a half. It would be a simple change to existing laws on the books and it would create an incentive for businesses to stop taking advantage of their workers.
Even if you think “Zach, you are going to far.” If you think my recommendation is too much, let us at least put limits on these companies. Let us put a cap saying it is illegal to work someone more than 60 hours per week. 60 hours per week is already horrible. We decided it was inhumane 83 years ago. Let us at least put some limit in place. We, as a society, get to decide what an inhumane work environment looks like. A 98 hour per week workplace is inhumane, and it should not happen in any business in the United States. And there should be laws on the books to make sure it does not happen.
Again, I am sure the free market people will argue, that if these workers at Goldman Sachs are so unhappy, they can just leave. Can’t they quit their jobs? No. They really can’t. Where are they going to go? There are no alternatives. All the major investment banks, and all the major accounting firms treat their employees the same way. There are no protections. You are expected to work insane hours. Of course, the employee could become a blue collar worker in a factory, where they would at least have some protections. But I am betting they became an accountant or a finance professional because they like the job and want to do meaningful work. The bottom line is it is not right. You should not be put in the situation of having to decide to work a 98 hour work week, or quit your job. That is not right. You should have the opportunity to do your job in a happy and healthy workplace environment. These jobs are important roles in society and we should be treating these people with some dignity. We need good people to become financial professionals, and we need them to be in an environment where they can make good healthy decisions.
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Neither Zach De Gregorio or Wolves and Finance shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.