What Goldman Sachs teaches us about the future of careers?

Sem títuloGoldman Sachs is a two-sided coin. On one side are the former employees dissatisfied with the bank’s policy. Perhaps the greatest retractor of the Sachs culture is Greg Smith (former director and head of the United States equity derivatives business in Europe, the Middle East and Africa), who after 12 years left and did an incriminating article in the NY Times. Terms such as vultures and toxic culture have often been replicated to the delirium of the eternal haters of Wall Street.

On the other hand, there are former employees who thank (not effusively, of course) for the teachings of everyday life learned in the daily life of the bank. We are not here to judge who is correct, after all each person has an idealistic view of the world. However, experience shows us that anyone who sees a realistic view is to a large advantage in the race.

Why should I pay attention to what Goldman does?

What is undeniable on both sides are the results. Goldman has existed since 1869. There are 148 years of lucrative history. Despite some downsides along the way, the bank is recognized and respected internationally, despite hatred and envy. These guys have gone through countless disruptive shifts in business models, the job market, legislation, customs … and they’re still at the top.

Goldman is often copied by his peers. Everything that starts there is spied on and reproduced by competitors. Why? Simple. Results. If it works, let’s do these guys alike.

We are following the world’s latest transformation and what Goldman has been doing about it.  For example, in 2000 the U.S. equities trading desk at Goldman Sachs’s New York headquarters employed 600 traders. Today there are just two equity traders left. Automated trading programs have taken over the rest of the work, supported by 200 computer engineers.

No matter how good these guys were. They cost a lot more than a few machines. Machine has no ego, no psychological side shaken, no complaints and no aspirations to take the place of the boss.

Talents from all over the world are looking for Goldman

Goldman is undoubtedly the preference of many young people to enter the labor market. The bank received 131,000 applicants for 5,000 summer internships in 2016, which equates to a hire rate of ~ 4%. Further, the bank has a strong acceptance rate, with ~ 8 out of 10 candidates accepting job offers.

In previous decades, it was common to find young people with a background in humanities and social sciences at Goldman. We are facing a change in this aspect. In 2016 the bank employ 9,000 individuals in various engineering roles. Further, the bank is increasingly hiring non-finance majors for its analyst positions. ~ 37% of 2016’s new campus analysts had college degrees from the science, technology, engineering, and mathematics (STEM) disciplines.

These simple numbers can be interpreted more objectively.

Conclusions

We come to two conclusions that converge with earlier posts on employability (here, here and here).

A) The automation of countless jobs is more real and present than the average person imagines. There is no job ‘0% risk of automation’. There is a degree of risk, as we have explained here.

B) Humanities and Social Sciences (anthropology, sociology, law, history, geography, Philosophy, Psychology, Literature, Pedagogy, etc.) are becoming less prestigious by the market.

See the chart below. The red excerpts from the charts are the absorption of * Ph.D. * professionals in the industry / business sector. People with a Ph.D. in the Humanities and Social Sciences perform in the academy, non-profit and government.

Sem título

We’ve been alerting a long time to the disruptive changes in careers. Goldman is a micro-picture of the global macro situation: (i) automation in a number of areas, (ii) no need for graduates in humanities and social sciences (unless they accept a hunger wage); iii) need for engineering and physical sciences to act with technologies, big dates, codes, programming, etc.

Where do you fit in?

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6 thoughts on “What Goldman Sachs teaches us about the future of careers?

  1. I read the article and Greg’s book. He is an ungrateful resentful. We know that the NY Times is a strong opponent of Wall Street, and its no surprise that his text was printed there

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  2. TR, you are doing a very good job with those posts about automatization. In the future we’ll remember everything and tell that you had predicted the future.

    I be thinking what will be of ours sons, grandsons….

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    • BPM

      Facing reality is difficult for most people, but that’s what gives them an edge in the long run.

      From what I see on your blog, you are within those few who prefer the harsh reality that offer reward in the long run.

      Thank you for the words!

      Like

  3. The technology will destroy countless jobs that cost thousands of dollars to college training. Everyday I see less and less and less and less value in borrowing 100k student loans for a college degree

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