Goldman Sachs Junior Analyst Program
A Ticket to Investment Banking Careers
The Goldman Sachs Junior Analyst Program, instituted in the 1970s to develop top talent for its investment banking division, officially was eliminated by that firm in 2013. As with similar programs offered by its key rivals on Wall Street, many participants would use the Goldman program as a stepping stone to even more lucrative (and often much less stressful) positions elsewhere.
Many of Goldman Sachs' competitors long have found it cheaper to poach talent developed there, than to cultivate it themselves. In fact, as the years rolled along, increasing numbers of junior analysts at Goldman Sachs apparently sought positions at other firms while still enrolled in the program, an activity that violated the terms of their employment contracts. In particular, private equity firms reportedly have been particularly aggressive in recent years in hiring top financial talent that was developed in the Goldman Sachs program.
Hallmarks of the old Goldman Sachs program were a preponderance of grunt work and extremely long hours, including working overnight, sleeping in the office, and essentially being on call 24/7. Those who survived and thrived in this environment inevitably tended to be those who live to work rather than work to live.
Among the so-called millennial generation, those born roughly between 1981 and 1997, the appetite for such a grueling pace is much lower than among older cohorts of workers. Those who sign on for heavy workloads such as those imposed on junior analysts increasingly do so with an eye towards leaving in short order for firms that offer better work-life balance, after building a resume and establishing a high level of pay. See our related articles on why Wall Street is losing talent to Silicon Valley and why top MBAs are avoiding Wall Street.
In November 2015, Goldman Sachs announced a new set of initiatives aimed at improving the work environment and job prospects for its current crop of junior investment bankers, hoping that this will increase job satisfaction and employee retention among them. In particular, the firm promises to reduce the amount of pure grunt work and to speed up the availability of promotions for top performers.
According to The Wall Street Journal ("Goldman Sweetens Deal for Young Bankers: Bank adds the third year to the program, aims to relieve drudgery," November 5, 2015), Goldman hires about 2,000 junior analysts each year. Competition for these positions is fierce, and Goldman has its pick of talent. However, as noted above, retaining its analysis has become increasingly problematic. Pay for junior analysts in their first 2 years is a salary of about $85,000 plus participation in bonus pools. Those who are promoted to associate will earn significantly more.
What Junior Investment Banking Analysts Do
Whether or not they are an informal program, junior investment banking analysts typically work under the direction of more senior investment bankers or investment banking analysts. The work done by the junior analysts normally will cover:
- Proposed and pending deals
- Pitches made by investment bankers to existing and prospective clients
- Studies commissioned by clients
The specific tasks assigned to junior analysts will include, for example:
- Researching companies
- Analyzing financial statements
- Closely reading financial documents and contracts
- Assembling presentations (such as pitch books)
Other Analyst Programs at Goldman
However, Goldman Sachs indicates that it will retain two-year contracts for aspiring analysts in its sales and trading and investment research divisions. The primary reason is that participants in these programs have shown much greater loyalty to the firm, with many fewer defections to rival firms or MBA programs.