Title: Why are new graduates leaving prestigious firms like Goldman Sachs and Morgan Stanley after 2 years?
I have noticed a concerning trend among recent graduates who are leaving renowned companies like Goldman Sachs and Morgan Stanley after only a couple of years. For instance, I recently met someone who graduated at the top of her class from a prestigious Ivy League school, landed a job at GS in investment banking focusing on M&A (considered the best in the industry), but decided to move on to a job at a sovereign wealth fund after just two years.
This pattern seems to be happening more frequently, and I can’t help but wonder if having these prestigious companies on your resume is enough to secure a higher total compensation elsewhere, with better work-life balance. Could it be that only average performers stay at these big firms while the top performers seek quicker advancements and the underperformers move to less demanding companies?
One response
This phenomenon of new grads leaving prestigious companies like Goldman Sachs and Morgan Stanley after just two years can be attributed to a variety of factors. Here are some reasons behind this trend:
Career advancement opportunities: Many top performers at these firms may feel that they have learned enough in their roles and are looking for faster career advancement opportunities. The traditional career trajectory in investment banking involves long hours and demanding work, but it may not always lead to rapid advancements in terms of job title or compensation. Moving to other firms, such as sovereign wealth funds (SWFs) or hedge funds, can offer faster promotions and higher pay.
Work-life balance: Investment banking is known for its grueling hours and intense workload. After a couple of years of working in such an environment, some new grads may seek better work-life balance opportunities in other sectors or companies. SWFs, for example, may offer roles with more predictable hours and less pressure compared to investment banking.
Financial incentives: While top-tier firms like Goldman Sachs and Morgan Stanley can provide a strong foundation for a career in finance, they may not always offer the highest total compensation (TC) compared to other firms in the industry. New grads may be enticed by the possibility of earning a higher salary or bonuses at other institutions, especially if they are high performers seeking better financial rewards.
Personal preferences and career interests: Some individuals may realize that investment banking is not the right fit for their long-term career goals or interests. They may choose to explore other sectors within finance or even pivot to different industries altogether. The experience gained at top firms like Goldman Sachs and Morgan Stanley can be a valuable asset on their resume, opening doors to a wide range of career opportunities.
In summary, the decision of new grads to leave prestigious firms like Goldman Sachs and Morgan Stanley after two years can be influenced by a combination of factors such as career advancement opportunities, work-life balance considerations, financial incentives, and personal preferences. Each individual’s situation is unique, and it’s essential to carefully evaluate what matters most in terms of career goals and aspirations when making such decisions.