Goldman Sachs has initiated a program requiring junior bankers to confirm every three months that they have not accepted job offers from private-equity firms. This step aims to combat the industry trend of on-cycle recruiting by private-equity companies, which has been undermining banks' efforts to retain their analysts. Experts caution that such loyalty measures could backfire, as overly strict rules may lead to decreased employee loyalty. Young finance workers are increasingly attracted to private equity for a more favorable work-life balance, prompting concerns among investment banks regarding retention and productivity.
Goldman Sachs plans to confirm with junior bankers every three months that they haven't lined up private-equity jobs in an effort to crack down on talent poaching.
Experts point out that loyalty oaths and preventative measures against poaching can instead provoke a backlash from candidates regarding their loyalty to the firm.
Young workers in finance increasingly view opportunities at private-equity firms as a means to achieve a better work-life balance compared to the demanding hours at investment banks.
Investment banks seek a return on their investment from new workers, who become significantly more productive after their initial two years.
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