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Evil bonuses lead students astray
30 April 2008COMMENTS
Most of my friends went into teaching, charity, consultancy, PR, journalism etc, turned off banking by the perception of long hours et al. 4 years on, I certainly made the right choice, my quality of life is by far superior to my peers. My children will go to £24k/yr boarding schools, theirs will be sent to state grammars, giving them a significant disadvantage for networking. Read all comments »RELATED ARTICLES
Mervyn King has weighed in on the bonus debate. The guvnor says big payouts have encouraged too many talented people to squander their lives in banking when they could have been doing something more constructive instead.
King made his comments to the Treasury Select Committee.
According to the Telegraph, King says young people look at City compensation packages and think they “dominate almost any other type of career ... It's not a very attractive situation that such a high proportion of our talented young people naturally look at the City and think it is the only place to work in. It shouldn't be. It should be one of the places, but not the only one.”
Talented yoof confirm Merv’s fears. One Cambridge student confesses that he might think of doing a medical PhD or going into the voluntary sector were it not for the fact that he’s leaving university with a £15k overdraft and needs the cash.
“During my gap year I worked at Pizza Hut and earned £200 pounds a week. As a summer intern in an investment bank I’ll be earning £700 pounds a week. There’s no comparison,” he says.
“Put bluntly, yes, people do go into investment banking for the money,” confirms Gordon Chesterman, head of the Cambridge University Careers Service. “But we do work hard to promote a wide variety of other careers.”
Bonuses may not need to be reformed to put students off – mass redundancies should be a more effective deterrent.
However, they don’t seem to have had an impact yet. Martin Birchall, director of High Fliers Research, a company which monitors top students’ career aspirations, says a record number of students want to go into investment banking this year: “Despite all the problems in the City, it's still as desirable as ever.”
Are you overpaid? Should bonuses be reformed? Have your say below.
COMMENTS
Anon, Student, Wed 30 Apr 08
Untill bonuses are substantially trimmed or working practices in banks become unpleasent enough to be a detterent in themselves people will always consider a financial career.
The simple fact is few other careers pay as well, despite comparable working hours & stress. Such has been the shiftof the UK economy and such is the expense of further education for other careers (doctors, teachers etc) that it seems finance is the only option for those who wish to start a well paid career quickly.
The fact finance and the Civil Service are two of the most popular graduate job destinations says much for the inflexibility and lack of real work incentive in the modern British economy. This also contributes to the imbalance of the services industry in national employment, which accounts for the unusually harsh effect the Credit Crunch will have on the British economy.
No credit = no ready money = no services = no jobs.
anon, Capital Markets, Wed 30 Apr 08
Money is a big factor but not the only factor.
Finance can be very interesting and challanging. If students who want to work in Finance do not have the interest and guts for the City, they should work for another industry because they will not get a good bonus and would not last very long.
Chris, Wed 30 Apr 08
I think people dont have the slightest idea what this industry is about when they join. Only $ signs in their eyes....in the end though, no money to spend it and a ruined health after a few years. I have met many students are so naive... they will have hard time adjusting to this environment
Add your comment »John, Accounting, Wed 30 Apr 08
The status of working in the City/Canary Wharf is all too arousing for many! They speak loudly on their phones on the train about working in 'The City' and 'the markets' even if it's just as an office operative. I guess that's how we've evolved - in tribes of workers bunched by status. I observed that IT and HR were at the low end and everyone else was somehow superior.
Add your comment »Henry, FX & Money Markets, Thu 01 May 08
I graduated from Cambridge in 2004 and became a trader at a top investment bank. Most of my friends went into teaching, charity, consultancy, PR, journalism etc, turned off banking by the perception of long hours et al. 4 years on, I certainly made the right choice, my quality of life is by far superior to my peers.
I have a £1.2m property (paid off most of it) and a buy-to-let flat, they are still renting.
I take 1st class Virgin Atlantic to exotic destinations and stay in 5* hotels, they take EasyJet to Barcelona.
I live my life without worrying about money at all, they have to watch their wallet/purse for everything.
I have no qualms paying £20 to go to a nightclub, they walk away when hearing entry fees and miss a night of fun.
My children will go to £24k/yr boarding schools, theirs will be sent to state grammars, giving them a significant disadvantage for networking.
And it looks like we all seem to have the same sort of hours, same ups and downs and similar stressful periods. Given the similarity of graduate jobs, the highest quality grads are doing the right thing chasing the big bucks. Trust me it leads to the happiest, best quality of life!
Nadia, Capital Markets, Thu 01 May 08
Dear Henry, you speak of material things only. And you are so excessive: the great life on the one hand, misery on the other hand. Of couse almost everybody likes comfort, exotic travels, etc. But material things are not the only thing to consider. People make choices depending on their preferences and some prefer, yes prefer doing things more useful to society than trading or receiving excessive bonuses for M&A. As for the same level of stress, and working hours, it really depends on what you do. A very best friend of I works in M&A and it has become very difficult to just have a coffee. I prefered when we met regularly, and so did he.
Add your comment »Henry, FX & Money Markets, Thu 01 May 08
Yes Nadia, I agree M&A is awful in the sacrifice it has to your standard of living. That's why I said trading, where you work 50-60 hours a week, which is the same as many graduates in consultancy, law, PR, media etc, the difference being that you get a lovely annual 6-figure bonus. Whilst they say money doesn't buy happiness, a 6 figure bonus definitely buys you whatever opportunities / things you need in life to be happy. I see my peers' standard of living and happiness massively hampered by them being unable to afford the things I can and thus not enjoy the same things. Sure, there may be a minority who actually care so much about what they do that that counteracts paypacket, but for the majority of high quality grads, they're no doubt doing the right thing chasing the coinage, which all other factors considered equal-ish, no doubt leads to a better life.
Add your comment »spot n forward, FX & Money Markets, Thu 01 May 08
nadia - yes Henry speaks of material things, but in Western Society those material things are important in having the capacity to lead a happy life. yes, money doesn't necessarily buy hapiness, but it can help. without wanting to mis-quote statistics, i believe there is some well-documented research asserting that those who are wealthy RELATIVE TO THEIR PEERS are the happiest and most content. this, living in London, is what Henry speaks of.
i am in a similar position to Henry, though not quite to the same extent. to have what he has, assuming no outside financial help is extremely impressive inside four years. good luck to you.
Peter, Student, Thu 01 May 08
Henry - the archetypal fool. In a world where so many find themselves living in desperate circumstance, why is it that young men such as he, feel the need to massage their egos by building great temples to soothe their own insecurities. What price do they place on helping their fellow man? Although, his "friends" from University now work in such "lowly" sectors as teaching and charity, what contentment must they feel from knowing that they make a difference to people's lives everyday. That these halcyon days that he places such great reverence over allow him to become the greater man and help those of such lesser prosperity than he. Best wishes to you Henry. Peace and Prosperity. ~
Add your comment »George, Research, Thu 01 May 08
I have a PhD in Biophysics and 3 bachelors in Physics, Biology and Psychology. I have always wanted to do science and give to society what mostly interests me, that is, knowledge and cutting edge technology. So when I finished my PhD I started working for a startup R&D company trying to make new generation detection equipment for hospitals, anti-terrorism agencies etc.. Almost three years down the road I am looking to go into quant analysis in the City. I have found that doing what you like makes you happy if there are enough people in your society that appreciate it. Modern english society doesn't give a damn about science. Examples: open new scientist and laugh at the salaries companies give to scientists even with a PhD or read about the recent budget cuts in natural and health sciences. If society as a whole feels like that, who am I to disagree. If I go to the city I won't be doing an exciting (to me) job, but it will be less stressful than research and my weekends will be spend in big cities all over Europe. The argument between money and happiness is pretty irrelevant for people who can achieve high goals, and in today's society the high goals that pay are only in the City.
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