The Toll of Analyst Burnout

Following the death of a young investment banker earlier this year, C-suite leaders at top investment banks have implemented new measures to cap junior banker work hours. Junior banking roles are well known across the industry to often exceed 100 hours a week in grueling, cut-throat conditions, especially during pivotal deal periods. 

In recent times, investment banks have taken concerted efforts to limit, track, and manage analyst hours. Some of the bigger banks—JP Morgan in particular—have created unique roles to ensure managers are complying with 80-hour workweek caps for junior bankers. They have even implemented measures that affect bonus pool payout for those in violation.  

With interest rates expected to continue dropping into 2025, the industry is preparing itself for an uptick in deal activity. This means that analyst resources will be put to the test under the newly instituted timekeeping system.

In the past, a reduction in analyst hours could have resulted in minimized output or not being able to come through for a critical deal. The dawn of AI and generative-AI-driven market intelligence platforms like AlphaSense have paved the way to maximize research roles, such as those of junior bankers, with the ability to surface the insights and intelligence crucial to deal activity in a fraction of the time it would take with traditional methods.  

The takeaway: Investment banks don’t need to compromise on the quality and quantity of research output as a result of capped analyst hours. 

A Heightened Focus on IB Culture

In recent years, there has been heightened scrutiny on the culture and work-life balance at investment banks, especially following a post-pandemic exposé crafted by first-year analysts at Goldman Sachs in 2021. The leaked slide deck, titled ‘Working Conditions Survey,’ detailed 100+ hour work weeks and stressful, sleep-deprived working conditions, with 77% of participants acknowledging ‘workplace abuse.’ Soon thereafter, Goldman’s CEO raised starting salaries for junior bankers and vowed to improve work-life balance.

Other large IBs followed suit and issued larger base salaries and perks such as Peloton bikes and gym memberships to offset the intense working conditions, in a hasty attempt to retain talent.

Grumblings among junior analysts ensued, with many citing a quick reversion to the notorious sub-culture of 100-hour-plus weeks and unrealistic workloads. Many also reported being told to lie about the number of hours they were working, and to keep them below a certain threshold. 

A Formal Cap on Work Hours

The death of a Bank of America associate, a former Green Beret, in May of this year prompted an outcry from critics, both within the banking community and outsiders alike, calling for stricter guidelines to protect younger bankers.

Findings from a Wall Street Journal investigation surfaced violations of an 80-hour work week that already existed at Bank of America. The bank has since instituted stricter policies to enforce daily detailed timekeeping and encourage analysts to notify superiors or HR if pressured to misrepresent their hours.  

Similarly, JP Morgan recently announced an 80-hour weekly cap, which mirrors New York State’s restrictions for medical residents. It also implemented a ‘pencils down’ window between Friday evening and Saturday at noon, with the exception of live deal periods. Similarly, Goldman Sachs announced a ‘Protected Saturday’ between Friday evening and Sunday morning.

Doing More with Less Resources

Increasingly, asset managers are investing in generative AI tools to streamline and bring efficiencies to their market research and due diligence process. Evolving use cases point to deal sourcing, portfolio optimization, market research, and due diligence, among others. It is clear that investment professionals are identifying opportunities to leverage the technology in the most meaningful way across their organizations. 

For investment banking specifically, AlphaSense users report a 50%-75% time savings when conducting early-stage due diligence. An activity that would once take several hours—for example, tracking down revenue breakdowns—can be sourced in under 15 minutes using the AlphaSense platform. Across nearly every component of research, there are countless opportunities to preserve time and resources for core deal functions. This is of essence in an environment with capped analyst hours, when resource allocation is particularly crucial. 

Cumulatively, this equates to thousands of hours saved in core analyst hours. The time preserved having to scour for content across multiple sets can be allocated to higher-value activities such as perfecting an investment pitch, netting insights across a broader deal set, and ensuring that analysts are not only within mandated hours restrictions, but also yielding the most with limited resources. 

Discover how you can optimize and maximize your research resources with AlphaSense’s industry-leading Generative Search.