Goldman Sachs to ease its yearly firings as industry faces talent shortage

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Goldman Sachs wants to bury the hatchet with its rank and file.

The Wall Street giant, which historically has fired about 5 percent of its workforce annually to shake out laggard bankers, plans to sharply shrink that number this year as it faces an industrywide talent shortage, The Post has learned.

With seasoned rainmakers and junior dealmakers alike job-hopping in record numbers, Goldman — headed by part-time DJ David Solomon — is closely monitoring what the bank calls “involuntary leaves” — jargon for a banker who resigns after nabbing an annual bonus, a source with knowledge told The Post.

“They expect a certain amount of of involuntary leaves,” the source said. “They have a whole monitoring system based on historical data and performance rankings and departures.”

On top of the 5 percent who get culled, banks typically expect an additional 5 percent of employees to exit after receiving a bonus. But this year, human resources departments at major firms are telling managers to start preparing for a “Great Resignation” of possibly 10 percent of junior employees who are in good standing, sources add.

These people add that HR departments are likewise warning managers to make “contingency plans” for workers to leave in droves after they bag their bonuses in January and February.

“Are the banks worried? Yes. Will exits continue? Yes.” Paul Webster, head of recruiting firm Page Executive, told The Post. “Any good HR persons are telling their teams to expect that.”

A man with a briefcase walks away from view
Big banks like Goldman Sachs are on the lookout for “involuntary leaves” by bankers after they bag what are expected to be big bonuses this year.
Bloomberg via Getty Images

Webster adds that bankers are already approaching him to sniff out new job opportunities for the coming year. And this year, nearly every major firm is on high alert.

As The Post has previously reported, bonuses on Wall Street are expected to hit records as financial giants like Goldman Sachs and JPMorgan grapple with a dire lack of bankers, even as demand for dealmaking continues to surge.

After winning significant salary bumps this year, Wall Street financiers can now expect a double-digit increase in year-end bonuses — a jump not seen since before the Great Recession, according to recent data from compensation consulting firm Johnson Associates.

David Solomon
Goldman Sachs, headed by David Solomon, is among Wall Street banks grappling with a dire lack of bankers, even as demand for dealmaking continues to surge.
Getty Images

With a historic tide of mergers, IPOs, spinoffs and other big strategic deals continuing to flow, bonuses for investment bankers will see the steepest jump, seeing a 30 to 35 percent increase in their bonuses from 2020, according to the firm.

Banks aren’t just hiking pay — they’re also making lifestyle concessions to employees. Recruiters told The Post Goldman Sachs and JPMorgan will set the expectation that people need to come into the office. But they’ll be willing to work around employees they really want to keep or hire.

Not everyone on Wall Street is predicting doom and gloom. One insider concedes there may be more departures than usual but believes the ample pay raises firms made over the past year will help retain some junior employees.

Goldman Sachs headquarters exterior at 200 West Street
Banks aren’t just hiking pay — they’re also making lifestyle concessions to employees.
Corbis via Getty Images

He adds that for most young workers, the cost of living in cities like New York mean they’ll need to stick with their day jobs.

“People are getting raises but it’s not like analysts are getting ‘f*** you’ money,” he told The Post. “Will we see higher resignations than usual? Probably. But it wont be enough to jeopardize a firm.”

A Goldman Sachs spokesperson declined to comment.

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