Expect some stiff competition if you want to get a job at Goldman Sachs. The firm receives 267,000 applications every year, and hires just 3% of these people.
The strength of Goldman’s appeal is evidenced by the fact that it tops our 2016 eFinancialCareers Ideal Employer rankings, which quizzed over 6,500 financial services employees in the U.S., U.K. and Asia on which companies they want to work for.
Goldman Sachs outranked its U.S. peers like J.P. Morgan and Morgan Stanley, which ranked second and fourth respectively, as well as Google (third) and asset management behemoth BlackRock, which came in fifth.
At the forefront of Goldman Sachs’ recruitment programme is Edith Cooper, global head of human capital management and executive vice president at Goldman Sachs. She says any potential employee can expect an “extensive interview methodology”. As well as the obvious factors like assessing someone’s experience and technical know-how, she says that an “ability to work through adverse situations” is also very important.
“Among the most important factors is how effectively you work as part of an overall organization,” she says.
One of Goldman’s perceived strengths in our survey was, predictably, compensation, with 85% of respondents suggesting that it pays competitive salaries and bonuses. Goldman has stated previously that its culture is still geared towards paying for performance, despite moves to cut compensation at other banks, but to suggest that compensation at Goldman is above and beyond its competitors or impervious to market movements is something of a myth.
CEO Lloyd Blankfein’s pay packet slipped by $1m on 2014 to $23m last year after a difficult period for the firm and a record $5bn fine to resolve civil claims dating back to 2007. Its overall compensation pool remained flat year-on-year, but an 8% increase in employees meant that average pay per head fell to $344k last year, from $379k in 2014.
How important is pay at Goldman Sachs?
“Several years ago, senior executives reinforced our compensation principles, which hold true at every level of the firm – we recognize and pay for performance, but in the context of not just the individual but the business across the divisions,” Cooper says. “One of the levers is compensation for performance.”
In 2013, Goldman Sachs said that it had 43,000 applications for 1,900 available graduate positions. Despite the huge interest in working for Goldman Sachs, Cooper says that their recruitment process has had to evolve to cast the net as wide as possible for potential employees, particularly at a graduate level.
The old tactics of turning up on campus at top universities have been supplemented by increased use of technology to both filter candidates and find them from unusual sources. Technology helps whittle down a shortlist, but Goldman considers every application, says Cooper.
“It’s important to find the best broad group of candidates beyond GPA and top-level information, going deeper to analyze a database of experiences rather than a database of facts and figures,” she says.
Goldman also uses social media to uncover potential candidates.
“We have a mobile recruiting app, host webinars and Google+ hangouts, use LinkedIn, Twitter and YouTube, and publish a tremendous amount of content on our careers site,” Cooper says.
Making it up the ranks was also an important factor for most people participating in our research. Of those people who wanted to work for Goldman Sachs, 81% said that opportunities for promotion were important to them, but only 62% perceived it as a strength of the firm.
Goldman’s ‘360’ degree appraisal process is notoriously tough, during which the employee, the employee’s superiors, peers and reports all offer their verdict on a potential promotion. In total, around 15 people could be involved in the process.
Cooper says that promotions are often decided on if the person has the right attitude, is “highly motivated” and contributes to the overall culture of the firm.
“In terms of who gets promoted, it’s people who are dynamic, intellectually curious and comfortable understanding that market forces can lead to opportunities and risk for our clients, being able to connect the dots to all of the things that are important to clients,” she says.
Finance professionals appear to have accepted that long hours are part and parcel of working in the industry. The vast majority of investment banks in our rankings scored badly on working hours, and just 13% of people who wanted to work for Goldman Sachs perceived it as a strength of the company.
Goldman has been making efforts to address this. Firstly, it introduced 'protected Saturdays' for juniors – meaning they have to be out of the office by 9pm on Friday and do not return until 9am Sunday – and it’s also tried to add more career stability and satisfaction.
The firm used to hire juniors with a two-year contract. Now, juniors are hired just as any other employee is, not for a specific timeframe but rather for as long as it’s still working out for both sides.
Goldman has also added a policy of accelerated promotion to the best IBD associates after two years, known as a “third-year mobility opportunity” allowing them to work in different region or group.
“We recognize that we work in a dynamic and demanding industry; however, we also know that it is important for our people to have the time to focus on their responsibilities and interests outside of work,” Cooper says.
Relative to its peers, Goldman is progressive in terms of flexible working arrangements. For a start, its onsite childcare facility has been credited with helping more senior women in client-facing positions transition more easily back into the workforce.
“Whether it be through the use of technology, flexible work arrangements, onsite childcare, gyms and healthcare facilities or any other number of programs, we aim to provide our people the flexibility and support they need for all phases of their lives, both personally and professionally,” she says.
Cooper says that Goldman is making efforts to ensure that junior bankers have opportunities to learn and are able to “connect with those around them”. Juniors are taken on an “apprenticeship model” where they learn on the job and are also given a chance to build a network that could help with internal moves.
“We know that many professionals, junior and more seasoned employees are interested in taking on new responsibilities and learning about and working in other business areas, and so we provide opportunities for our people to move around within the firm,” she says.
View the complete 2016 eFinancialCareers Ideal Employer Rankings