Thinking of a career as an investment banker? Get ready for insomnia, alcoholism, heart palpitations, eating disorders and a violent temper.
A University of Southern California researcher has found these health issues are part and parcel of the lives of entry-level investment bankers that she shadowed as they started their new careers fresh out of business school.
“When you work 120 hours a week, something snaps,” said Alexandra Michel, an assistant management professor at USC’s Marshall School of Business, who shadowed bankers for a decade to collect findings for the study.
“But the interesting finding is what exactly snaps,” she told CNBC. “It’s not technical accuracy; the bankers were quite precise in what they were doing. What snaps is creativity, judgment, and that’s really important in our new knowledge-based economy, because we now compete on innovations.”
Michel began shadowing Wall Street bankers for her study a decade ago, sitting next to them at the office, following them to meetings, basically mirroring their hours at the office and even staying up all night when the bankers pulled all-nighters.
She found that newly minted investment bankers can put up with long days at the office -- on average 80 to 120 hours a week -- and high levels of stress for about four years. After that, there are signs of long-term physical ailments, including insomnia, and substance addictions. Every banker she observed developed a stress-related physical or emotional injury within several years on the job, she said.
One bank vice president who struggled with addictions described his work life as a never-ending nightmare.
“I sometimes wake up in the morning and remember what I have done the day before and wished that it was just a bad dream and all I want is to keep it together for the day ahead and not allow my body to take over again,” the unnamed banker said.
Wall Street workers are likely putting in long hours now as the economy continues to struggle and the financial services industry contracts, said Dr. Alden Cass, a clinical psychologist in New York who specializes in treating Wall Street executives.
“People are working harder, longer and making less,” he said, and it’s leading to apathy and job burnout.
While people criticize Wall Street bankers for excessive pay, it’s an incredibly difficult and unpleasant job, said William D. Cohan, a former Wall Street investment banker and best-selling author of “Money and Power: How Goldman Sachs Came to Rule the World.”
“I used to say the job was good only one day a year -- the day when you got your bonus, and sometimes that day wasn’t that great,” said Cohan.
“You work too hard. You gain weight because you don’t get enough exercise, and you don’t get enough sleep,” he said. “It’s a surprisingly unpleasant job, but on the other hand you’re not putting your life on the line, and you’re not risking your own money. It’s an unpleasant lifestyle, unless you get to the top, and even there it’s not all it’s cracked up to be.”
The life of a junior investment banker is notoriously demanding, with long hours in a high-stress environment. The profession attracts ambitious business school graduates who are attracted by high salaries, and many of them know the grueling hours and stress the job requires.
Michel notes that her research was qualitative, involving a small group of bankers and no control group. It’s designed to identify patterns that can later be examined through systematic empirical investigation, she said.
However, Michel says the study’s findings can be applied to other areas of the working world.
“We have a lot of people in our knowledge-based economy -- lawyers, doctors, engineers -- who work really hard, and also in more traditional industries that are now competing because of globalization and fast-paced technological change. These people are also pushed to work quite hard,” she said. “So the study asks what the consequences are for these industries, and also for companies and society as a whole.”
The consequence of the overwork is a diminishment of creativity, and that can have a detrimental effect on the economy as a whole, Michel said, citing technology powerhouse Apple as an example.
“They outsource everything that’s related to manufacturing, but what stays here [in the U.S.] are the creative aspects, so I think we need to listen to this,” she said.
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