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Goldman Sachs may be a 2nd tier bank, but it still has 25 applicants per role

Goldman Sachs isn’t what it was. We’ve pointed out a few times that JPMorgan appears to be a better location for traders right now. In today’s Financial News, William Wright places Goldman in a 2nd tier of banks, including BarCap and Citi, that are merely, “muddling through.” The new top tier, according to Wright, includes Deutsche and JPMorgan, which are, “weathering the storm,” and seizing market share.

Is this true? Goldman would argue – and has argued – that it’s merely relinquishing the market share gains it made in 2008/2009, which it always said were transitory, and that it’s reducing risk in a challenging environment. However, its profits outside asset management were down 57% year-on-year in the first nine months, versus a decline of just 1.9% at JPMorgan’s investment bank and 20% at Deutsche’s corporate banking and securities business.

It remains to be seen whether this downturn in Goldman’s fortunes will impact the calibre of the people who want to work for it. If so, Goldman’s problems could turn secular.

So far, this doesn’t appear to be the case. Last week, Lloyd Blankfein said 300,000 people applied to work at Goldman Sachs in 2010 and 2011 and the bank hired less than 4% of them. This doesn’t look great compared to figures suggesting there are around 74 graduate applications per investment banking place across all banks in the UK, although it should be remembered that applications aren’t the same as applicants and each individual applies multiple times.

Once it’s got people through the door, Goldman still does a good job of keeping the ones it wants. Average tenure has increased to 5.5 years. On Friday, the bank announced 261 new managing directors (down substantially from the 321 it promoted last year). Their average tenure is expected to be 12 years.

Given the continued deluge of applicants, how can people differentiate themselves in applications to both Goldman and other banks? Megan Mcardle of the Atlantic points to a study that came out earlier this year suggesting that ‘elite employers’ look for ‘valid markers’ of a candidate’s worth. These include attendance of elite schools and participation in sports that, “resonate with white, upper-middle-class culture.”

Mcardle says banks like Goldman can’t help themselves from hiring people with these elite markers and that such performance proxies are necessary because hiring decision makers never have any time: “They’re not necessarily doing it on purpose. It’s just a convenient shorthand for a group of people who are really busy.”

Comments (13)

Comments
  1. Goldman 2nd tier….be quiet Sarah

  2. GS 2nd tier??? I think you drank too much during the week-end Babe.

  3. Tier 1 banks have 200 applicants per role. GS is a Tier 5-8 bank now.

  4. Sarah are you perhaps bitter and resentful to GS because they rejected your application to start as an MD in the “Financial News Reporting Division” you suggested they create for you?

  5. Really who cares about tiers?

    Does it matter if you work at Tier 1 or 2 bank?

    Working at a tier 1 bank doesnt mean you will get paid more.

  6. Another example of complete nonsense from Sarah Butcher. Sarah, leaving aside JPM, who would you rank ahead of GS?

  7. Sarah Butcher may be a 2nd Tier journalist, Bess Levin is Tier 1

    The Commentariat Reply
     
  8. Sarah do you have a vested interest in GS or London Business School?

  9. I’m an MD (since 2007) at one of the banks Sahrah suggests are now firt tier. Whoever suggests GS is tier 2, has no clue about banking.

  10. Goldman is so second tier, every last Harvard/Yaley/Oxon/name all the others who are a bit sad, are all fighting to get away from internships. Get real Sarah. The Evil vampire squid will get you else.

  11. Sarah, how much would you pay me for a blind date with Lloyd Blankfein’s son?

    BankingDatingAnalyst Reply
     
  12. Have people read the article? Sarah is reporting something a chap named William Wright said. In fact if anything she pointsnto factors that may in fact offer a differing opinion. You all clearly work for tier 2 banks where reading and attention to detail are not prerequisites.

  13. Id love a job at GS or JPM! do you think contacting senior mgmt via linked in will do the trick?

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