Morgan Stanley is wooing its investment bankers by introducing paid sabbaticals for newly-promoted vice-presidents and making earlier job offers to those at the start of their careers.
The Wall Street bank’s initiatives come as lenders on both sides of the Atlantic explore more creative ways to discourage talented staff from defecting to more fashionable industries such as technology and hedge funds.
A person at Morgan Stanley said the bank had recently unveiled the four-week sabbaticals for vice-presidents (VP) and that the reaction so far had been “very positive”. Morgan Stanley declined to make an official comment.
It typically takes about five years of long hours to reach VP level, where bankers usually earn more than $ 150,000 a year. The Morgan Stanley banker said the sabbatical scheme would be monitored to make sure staff did not think that they would be perceived as “weak” for taking time out.
In another strategy to keep staff, the bank will talk to analysts about their job prospects in November this year — three months earlier than the usual performance review. “We (will) communicate to people earlier in their careers that they have significant runway at Morgan Stanley, that we want them to stay,” the banker said.
“Previously we were doing that after the private equity recruiting season was already over for the first year . . . they almost had to forgo those opportunities without knowing very clearly from us [what their opportunities were].”
Hedge funds and private equity groups in New York typically recruit from banks in February, though some bankers say their analysts are often approached within weeks of taking up their roles.
Under its new timetable, Morgan Stanley will have just three or four months’ of employment to judge the capabilities of its first-year analysts, though some will have previously served ten-week internships. The banker said that was long enough to “figure out the high performers”.
Those high performers can also benefit from accelerated promotions, as will those deemed with high potential at several other investment banks including Goldman Sachs under an initiative unveiled last November, and Royal Bank of Scotland.
Other innovative schemes to improve banker retention rates include global mobility programmes, such as that offered by Deutsche Bank, and volunteer opportunities, in evidence at Citigroup.
Most banks have also brought in measures to improve work-life balance for junior bankers, including news this week that UBS has asked junior bankers to take two hours off a week to attend to “personal matters” and Credit Suisse has banned staff from working Friday nights, other than in highly exceptional circumstances.
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