For decades, junior bankers and Wall Street firms had an unspoken pact: in exchange for reasonably high-paying jobs and a shot at obscene wealth, young analysts agreed to work fifteen hours a day, and forgo anything resembling a normal life. But things may be changing. Last October, Goldman Sachs told its junior investment-banking analysts not to work on Saturdays, and it has said that all analysts, on average, should be working no more than seventy to seventy-five hours a week. A couple of weeks ago, Bank of America Merrill Lynch said that analysts are expected to have four weekend days off a month. And, last week, Credit Suisse told its analysts that they should not be in the office on Saturdays.
These changes may sound small, but, in the context of the Street, they’re positively radical. Alexandra Michel, a former Goldman associate who is now on the faculty at the University of Pennsylvania, published a nine-year study of two big investment banks and found that people spent up to a hundred and twenty hours a week on the job. In the pre-cell-phone, pre-e-mail days, it was possible for people to find respite when they left the office. But, as David Solomon, the global co-head of investment banking at Goldman, told me, “Today, technology means that we’re all available 24/7. And, because everyone demands instant gratification and instant connectivity, there are no boundaries, no breaks.”
Cry me a river, you might say. But what happened on Wall Street is just an extreme version of what’s happened to so-called knowledge workers in general. Thirty years ago, the best-paid workers in the U.S. were much less likely to work long days than low-paid workers were. By 2006, the best paid were twice as likely to work long hours as the poorly paid, and the trend seems to be accelerating. A 2008 Harvard Business School survey of a thousand professionals found that ninety-four per cent worked fifty hours or more a week, and almost half worked in excess of sixty-five hours a week. Overwork has become a credential of prosperity.
The perplexing thing about the cult of overwork is that, as we’ve known for a while, long hours diminish both productivity and quality. Among industrial workers, overtime raises the rate of mistakes and safety mishaps; likewise, for knowledge workers fatigue and sleep-deprivation make it hard to perform at a high cognitive level. As Solomon put it, past a certain point overworked people become “less efficient and less effective.” And the effects are cumulative. The bankers Michel studied started to break down in their fourth year on the job. They suffered from depression, anxiety, and immune-system problems, and performance reviews showed that their creativity and judgment declined.
If the benefits of working fewer hours are this clear, why has it been so hard for businesses to embrace the idea? Simple economics certainly plays a role: in some cases, such as law firms that bill by the hour, the system can reward you for working longer, not smarter. And even if a person pulling all-nighters is less productive than a well-rested substitute would be, it’s still cheaper to pay one person to work a hundred hours a week than two people to work fifty hours apiece. (In the case of medicine, residents work long hours not just because it’s good training but also because they’re a cheap source of labor.) On top of this, the productivity of most knowledge workers is much harder to quantify than that of, say, an assembly-line worker. So, as Bob Pozen, a former president of Fidelity Management and the author of “Extreme Productivity,” a book on slashing work hours, told me, “Time becomes an easy metric to measure how productive someone is, even though it doesn’t have any necessary connection to what they achieve.”
Habit, too, is powerful: things are done a certain way because that’s how they’ve been done before, and because that’s the way the people in charge were trained. When new regulations limited medical residents’ working hours to eighty a week, many doctors complained of declining standards and mollycoddling, and said that it would have a disastrous effect on training, even though residents in Europe work many fewer hours, without harming the quality of medical care. “I went through it, so you should” is a difficult impulse to resist.
To make these new policies stick, then, banks have to change not just rules but expectations. Indeed, as Michel told me, “it isn’t really external rules that force bankers to work the way they do. It’s an entire cultural system.” She cites the example of a consulting firm that mandated that people stay out of the office on weekends, only to discover that they were working secretly from home. In a culture that venerates overwork, people internalize crazy hours as the norm. As the anthropologist Karen Ho writes in her book “Liquidated,” “On Wall Street, hard work is always overwork.” Grinding out hundred-hour weeks for years helps bankers think of themselves as tougher and more dedicated than everyone else. And working fifteen hours a day doesn’t just demonstrate your commitment to a company; it also reinforces that commitment. Over time, the simple fact that you work so much becomes proof that the job is worthwhile, and being in the office day and night becomes a kind of permanent initiation ritual. The challenge for Wall Street is: can it still get bankers to run with the pack if it stops treating them like dogs? ♦
