Investment Banking or Technology - Which is the better career path for MBA students? (Part 4: Lifestyle)
This one is probably the most straightforward. Investment bankers work long hours, sometimes including weekends. But more so than the sheer number of hours, it’s the unpredictability of it that really makes work-life balance difficult. Even when you’re not technically in the office working, you are essentially always “on call”. This makes it difficult to make plans with your family and friends far in advance. Anytime you get invited to an outing, your answer is usually “yea maybe, but let me get back to you closer to the date”. But this is the nature of any client-servicing business, where your clients can lob in a request at any time, and don’t always care about giving you a reasonable deadline. It’s the same in management consulting. And it’s the same in corporate law.
Of course, as an associate, you don’t get the worst of this. After all, you have analysts under you who usually end up suffering from this the most. A lot of the times, you’re also waiting on your analyst to finish their work, so that you can check it for errors. Many associates don’t wait around in the office for this. They might go home, have dinner, and then get back online late at night once the analyst has sent over the draft. This is a luxury that analysts don’t have, and of course, the more senior you become, the more control and flexibility you’ll have over your schedule.
Furthermore, in recent years investment banks have also implemented policies to improve the work-life balance of their junior employees. Many of these policies are designed to protect junior bankers from having to work on weekends. In order to compete with the generous time-off policies offered by tech companies, the culture in banking has been gradually changing for the better on this front.
Tech companies win out over investment banks in a lot of the little things: you can wear whatever you want to work, you often work out of a hip office, you sometimes even have random perks like in-office massages, and you almost always have a fully stocked kitchen with drinks and snacks. But the most important thing is the hours - are the hours really better?
Overall, I would say they are usually better, but it’s more nuanced than that. There are multiple variables that determine what the norm is at each tech company:
Size of the company: the general rule of thumb is that the bigger the company, the better the hours. But as previously mentioned, that typically also means more narrow responsibilities, which some people find to be boring or too slow-paced. If you’re at a startup, your company is still in survival mode, so oftentimes you work just as hard as you would in banking, if not more.
Age of employees: along similar lines, startups also tend to have employees who skew younger in age; most have no family or other responsibilities outside of work, so they tend to spend a lot more time in the office, or at least are more okay with doing so.
Culture: the tone for most tech companies are set at the top. If the entire executive team consists of workaholics, you can rest assured it will trickle down. Nobody wants to be seen as a slacker by their boss. So if you’re working for Elon Musk, don’t expect to work only 40 hours a week - it just ain’t happening.
Competitive positioning: depending on how tough and competitive your industry is, that will also affect the culture of the company. For example, when I was at Square and Enjoy, I pretty much worked banking hours. Both were low margin businesses (payments processing and on-demand delivery). Square was competing with much larger incumbent players and trying to win market share. Enjoy was doing something highly complex that’s never been done by any other company before, and still trying to find its product market fit and prove out its unit economics. This was life or death for these businesses. But when I was at GitHub, my hours were much better. GitHub was the dominant player in its space already and also had extremely high gross margins selling a software product. It was the exact opposite of survival mode - the market was theirs to lose.
Your specific team: sometimes, especially if you’re at a bigger company, the culture can vary from team to team. Square was the biggest tech company I’ve worked at, and even though everybody at the company worked hard, there were definitely some teams that were head and shoulders above most other teams in terms of hours worked. This could be due to the scope of the team’s responsibilities, or simply due to the management style and expectations of the leaders of those teams.
Winner: Probably still tech, but it’s much more nuanced than you think. It really depends on many different variables for the tech company you’re considering: its size, the age of its employees, its culture, its competitive position in the market, and sometimes even the team that you work on. Your personal life also factors into how important work-life balance is, and how you want to prioritize that against the other factors we’ve discussed.
About the Author:
Sam Shiah is the founder of Wall Street Mastermind. As a former investment banker (Morgan Stanley, Deutsche Bank) and private equity investor (GI Partners), he closed 14 deals worth $9 billion in transaction value during his career on Wall Street. He is an expert on the investment banking recruiting process and a sought-after coach for aspiring investment bankers. Securing his first role in banking in 2008 despite one of the worst job markets in Wall Street history, Sam has first-hand knowledge of just how competitive and challenging it is to break into the industry, which has a <1% acceptance rate. More importantly, having been a part of the on-campus recruiting team at Morgan Stanley, he has intimate knowledge of how the recruiting process works at top-tier banks and has both screened and interviewed hundreds of candidates from the other side of the table. After his career on Wall Street, Sam worked at several technology startups in Silicon Valley, including Square and GitHub, before founding Wall Street Mastermind.