The old-line investment bank, Morgan Stanley, announced today that they will now be the most awesome, coolest bank for millennials to work for. In addition to cool perks and a kinder, gentler culture including cry closets, therapy dogs to pet, and safe spaces from mean baby boomer bosses, they will also pay their younger staff more money. Okay, I’m making up the part about the dogs and cry closets. But, Morgan Stanley, in a memo sent to junior bankers, did tell the younger employees that they will be paid more cash yo, promoted faster, allowed to actually take their vacation time, and will be able to work fewer hours.
The bank will raise base pay for associates in investment banking and capital markets by 20% to 25%. It is also speeding up its promotion process timeline for high-performers so they can go right to the top quicker. Morgan Stanley claims that these new ideas will be implemented to recruit, attract talent, and compete with the tech companies in Silicon Valley that are stealing the best and brightest university graduates.
Previously, UBS, the large Swiss-based bank, announced that it would pay the lion share of bonuses to their highest earners and, additionally, their youngest (millennial) employees.
If you are wondering, no, not the youngest and biggest profit generators. Millennials are getting these bonuses solely because they are, well… millennials. The logic behind UBS’ decision, which, according to Bloomberg, is now becoming the norm on Wall Street, is that banks need to pay their younger staff exceptionally well to keep them from defecting to Silicon Valley and tech start-ups.
It used to be that Wall Street was the go-to place for eager, money-hungry, status-seeking, Ivy League alumni. As Wall Street caused a little thing called the financial crisis, engaged in market rigging, Ponzi schemes, money laundering scandals, and rung up hundreds of billions of dollars in fines, the best and brightest college kids started having second thoughts about a career in investment banking.
You know what? I’m being too politically correct here. I’m sure that they really couldn’t care less about these shenanigans, as long as they could make enough money to pay off their student loans, get a loft apartment in Williamsburg, Brooklyn, buy a Lamborghini, and purchase a cool place in the Hamptons. It’s just now that they don’t need Wall Street to achieve these materialistic goals. Silicon Valley and tech companies can offer an easier and quicker path to riches. Real player cheddar, yo – millions and sometimes billions in stock after their company goes IPO – type money. These kids don’t have to settle for a measly $200k and listen to a boring, stuffy 35- year-old dinosaur pontificate about spreadsheets.
I think there is something even more sinister involved with Morgan Stanley, UBS, and other banks that are following this plan. By rewarding the big producers and keeping the younger staff happy, the middle-aged people will be squeezed out. It is a not-so-subtle message to employees in their late 30’s-on-up that if they don’t produce profits, they are gone. Their job will be relocated to a cheaper location and they won’t be invited to go there. A junior person will take their comfortably worked-in seat. It is a blatant statement that if you are of a certain age and not a top-producer, you are not welcome here anymore. It’s time to be put out to pasture.
Would any bank or company do this to any other group? They would not dare to cherry-pick a racial, ethnic, religious, or gender group of people to pull back on bonuses and make them feel irrelevant and unwanted.
Also, what type of message are the banks sending to this group of privileged, young people? The banks are creating an environment where they’re reinforcing the stereotype of “everybody deserves a gold star” mindset that millennials are accused of having been raised with. It will lead them to have a false sense of entitlement and unearned sense of self-worth, which may doom them to long-term failure.
Now, I’m not blaming millennials. It is management that is pitting the generations against one another. As the millennials age, the companies will do the same thing to them with generation Z.