In December, Bloomberg News set forth analyzing Wall Street’s “existential angst,” at the culmination of a year in which the financial industry might instead have felt self-congratulatory. A robust market and resurgence of deal-making led major banks to near-record profits; bonuses were expected to soar.
In this second pandemic year, bonuses would reach the highest point “since the Great Recession,” the business press repeatedly exulted, overlooking the incongruities of a system that so reliably converted the hardships of the many into gains for the very few.
Bonus season, having arrived, has lived up to expectations, with big investment banks increasing compensation packages by roughly 20% to 50% of last year’s payout. The “angst” was born in part of envy, as cryptocurrency was turning 10th graders into multimillionaires free of the burdens of online team meetings and participation in never-ending initiatives to transform corporate culture.
“Culture” was the other part of the equation, a persistent problem heightened by the isolation of the pandemic. Wall Street is accustomed to internal attacks over the relentless demands it famously makes of the young. This kind of self-reflection is cyclical: corrections follow tragedy. In 2013 the sudden death of a 21-year-old banking intern in London, who was regularly working through the night, prompted some very vocal change. But the old patterns reestablish themselves soon enough.
COVID brought renewed concerns. In March, a leaked PowerPoint presentation assembled by 13 junior bankers at Goldman Sachs made its way around social media, reverberating throughout the financial world with complaints of 110-hour workweeks that amounted to “abuse.” As one analyst quoted in the presentation put it, “I’ve been through foster care, and this is arguably worse.”
The industry responded with higher base salaries for those young bankers traditionally worn to the bone, spot bonuses and even Peloton bikes. But would this really quiet the agony at a moment when work habits were undergoing reevaluation across professions and social class, when we were in the midst, we were told, of the Great Resignation?
Toxic work culture translates to attrition
Research published last month in the Massachusetts Institute of Technology’s Sloan Management Review offers some insight. The salient point it makes is that a “toxic work culture” was more than 10 times as predictive of attrition than insufficient compensation. The analysis began with an examination of 34 million online profiles, culled by Revelio Labs (one of the authors, Ben Zweig, is CEO) to identify workers who left their jobs between April and September last year. From there, researchers estimated attrition rates, at the individual corporate level, for 500 organizations employing about a quarter of the private-sector workforce.
Attrition rates in the financial sector hovered around 9% and 10%, several points higher than those for the health care and telecommunications industries and nearly twice as high as the figure for the airlines. Management consulting, with its own outsize commitments to round-the-clock scheduling, averaged one of the highest attrition rates: 16%.
The study also uncovered interesting variations within industries. The rate of workers leaving Goldman (15.2%) was three times as high as those leaving HSBC, for instance, researchers determined.
I asked Zweig, a labor economist who also teaches at New York University’s Stern School of Business, about these and other findings. Follow-up research on toxic workplaces, he told me, indicated that those companies rated best by employees during the past year were those that bore some relationship to the pandemic itself — medical research firms and even food-delivery services. “It led us to conclude that what seems to be driving this is that people get some increased satisfaction when their work matters,” he said. “It’s a little corny, but meaning seems to be more important than it used to be.”
In his 1931 essay, “The Economic Possibilities for Our Grandchildren,” economist John Maynard Keynes speculated that by 2030 we might have achieved a standard of living high enough that people would work no more than 15 hours a week, devoting themselves to relaxation, culture, enjoyment, “meaning.”
“It will be those peoples, who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life,” he wrote, “who will be able to enjoy the abundance when it comes.”
Live to work or work to live?
Keynes could not foresee just how narrowly some would define “abundance” or just how unevenly it would be dispersed or just how ferocious some kinds of ambition would become. But at the same time, Keynes’ utopian vision seems less inconceivable now than it would have just two years ago, when it easily might have seemed insane.
A retrenchment from the primacy of work has significant implications not just for individuals and families and society but also for those cities animated by the ideology of hustle and drive. What is New York if it is no longer a place where so much is sacrificed to the gods of aspiration?
A January survey conducted by the Partnership for New York City, a nonprofit consortium of business interests, found that only 16% of employers were seeing average daily attendance in their Manhattan offices exceeding 50%. While this was largely a factor of the omicron surge, close to 40% surveyed did not expect that ratio to increase by the end of March.
But are we perfecting “the art of life itself” in the meantime? It would have been hard to draw that conclusion Wednesday in Central Park when German pop artist Niclas Castello displayed his hollow 400-pound gold cube opposite the Naumburg Bandshell, where people in parkas stood in slush to take selfies with it. The gold, worth about $10 million, had been procured by the artist from a Swiss bank after which he paid a fabricator to turn it into a box. His plan is to sell the exercise as an NFT.