J.P. Morgan has quietly become the investment bank that most finance professionals want to work for. It’s displaced Goldman Sachs from the top spot for the eFinancialCareers 2017 Ideal Employer rankings, which received over 17,600 votes from financial services professionals in the UK, U.S. and Asia.
If you want to work for J.P. Morgan, get to the back of the line. While Goldman Sachs has a 3% acceptance rate for the 250,000 graduates trying to get through the door, J.P. Morgan lets in 2% applicants into front office entry-level roles.
Meanwhile, for its investment banking internship programme – the most obvious route into a full-time role – applications have increased by 50% since 2015, the bank tells us.
Last year, Goldman Sachs was first in our rankings, but in 2017 J.P. Morgan moved to the top. Google, meanwhile, remains a fantasy employer for many financial services professionals (both within tech and other sectors) and finished third for the second year running.
In truth, despite the fact that Goldman Sachs generates more headlines than J.P. Morgan, the latter dominates the investment banking revenue tables.
Goldman Sachs topped the global M&A rankings with 10% of the wallet in 2016 – down from 12% in 2015 – but J.P. Morgan was first in the overall global investment banking revenues, according to Dealogic figures.
J.P. Morgan was also ranked first across fixed income currencies and commodities (FICC) in 2016, according to the latest figures from research firm Coalition (Goldman was second). It was also first in IBD (again, Goldman was second) and tied in second place with Goldman in equities (Morgan Stanley was top).
Investment banking pay versus working hours
Goldman Sachs may have handed out ‘donut’ bonuses for 20% of its investment banking division staff this year, but it’s reputation as a big-payer remains.
82% of people who voted for Goldman believe it offers a competitive salary, and 76% would expect a big bonus. This compares to 76% and 67% respectively for respondents who voted for J.P. Morgan.
Predictably, financial services professionals were most concerned about pay. 86% of respondents who voted for J.P. Morgan said a good salary was important to them, as did the same proportion of Goldman Sachs voters. Similarly, 76% of Goldman voters and 75% of those who chose J.P. Morgan expected a big bonus.
Like for like pay comparisons across both banks are difficult, largely because J.P. Morgan reports its compensation spend for the investment bank together with lower paid corporate bankers.
However, the latest figures for senior bankers in the UK – the so-called material risk takers (MRTs) – suggest that Goldman still pays more. Goldman paid its MRTs an average of $2.8m in 2015 (the latest figures available) compared to $1.1m at J.P. Morgan. However, 311 people at J.P. Morgan earned over €1m, compared to 286 at Goldman Sachs.
Lower down the career ladder pay is on a par at both banks. The average salary for first year associates was £91k ($114k) at Goldman Sachs and £90k ($113k) at J.P. Morgan, according to figures from recruiters Dartmouth Partners, with £69k ($87k) and £60k ($75k) bonuses respectively.
Anyone going into banking expecting reasonable working hours is in for a shock, but J.P. Morgan has the edge over Goldman Sachs here. 24% of people who chose J.P. Morgan said that they expected manageable working hours, compared to 14% at Goldman.
Bankers clearly want more of a life outside of work, as 45% of J.P. Morgan voters said it was important to them, compared to 41% at Goldman. Interestingly, Goldman lags behind its banking peers in the top five – 28% of those who voted for Citi expected reasonable working hours, and 21% of those who chose Morgan Stanley said the same.
What’s more, while Google is known for making every effort to ensure its employees never have to leave the office, 58% of those who voted for them think that more reasonable working hours are on the cards.
U.S. banks beating European firms
It’s no secret that European banks have been losing out to their U.S. rivals. U.S. banks have long-dominated their home turf, but more recently they’ve been eating up market share from domestic banks in Europe. This is reflected in our rankings.
Deutsche Bank has been at the sharp end. It’s been rolling out some big cuts to its investment bank, making structural changes and cutting compensation to the bone. The gloom around Deutsche Bank has meant that it has fallen more places than any other major bank in our rankings. Last year, Deutsche Bank was ranked 11th in the global Ideal Employer rankings, but it has fallen six places to 17th in 2017.
Deutsche’s recent moves have impacted how finance professionals perceive it across the board. Just 52% of respondents who voted for the bank believe that it offers a competitive bonus and 63% said they expected a competitive salary – this is among the lowest of any investment bank in the rankings and is down from 58% and 72% respectively last year.
Similarly, just 40% of respondents said that Deutsche Bank’s financial performance was a strength, down from 54% last year.
Most European banks fell down our rankings year on year, though. UBS slipped two places to joint 8th in 2017, as did Barclays which ended up in 14th. Credit Suisse and BNP Paribas also fell by one place. HSBC, which moved up one place to 7th, was the only European bank in the top 20 to improve its position.
Meanwhile, U.S banks Citi and Bank of America Merrill Lynch both moved up two places to 5th and joint 8th respectively.
The growing threat of large technology companies
Google finished third in the global rankings again this year. To some extent, this is simply a case of financial services professionals choosing a seemingly innovative and exciting fantasy company while remaining firmly employed at a conservative bank.
But banks need to be aware of the growing appeal of technology companies to their employees. It wasn’t only Google that made the rankings. Facebook, Apple, Microsoft and Amazon were all in the top 30 this year – and made some big gains.
Amazon, for instance, moved up 17 places to 26th in the 2017 rankings, Facebook went up three spots to 15th, and Microsoft jumped up seven places to 24th.
Banks are positioning themselves as technology companies. More than 25% of Goldman Sachs’ employees are technologists, while J.P. Morgan employs 40,000 people in technology globally.
Whether banks like it or not, they need to accept that these technology companies – as well as a plethora of fintech start-ups – are competing against them for talent. Instagram recently said that it was actively trying to hire “disillusioned quants” from financial services organisations, for example.
But the flow of talent goes both ways. J.P. Morgan’s new head of machine learning, Geoffrey Zweig, joined the bank from Microsoft, the head of product for Goldman Sachs’ new retail platform Marcus, Michael Cerda, came from Facebook, while HSBC’s new digital CTO Phil Cheetham came from AOL.
Despite the increased focus on technology in banking, these large tech firms are still viewed as more innovative. 78% of respondents to the Ideal Employer survey who said they wanted to work for Apple expected challenging or interesting work, and 79% said the same for Google. For the top five banks, this figure was 42-56%.
View the complete 2017 Ideal Employer Rankings
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