Bank intern's death raises questions about race to wealth
The death of an intern working at the London offices of
Bank of America Merrill Lynch has prompted calls for city firms to take more
responsibility for the ambitious graduates who push themselves to the limit to
secure jobs at the world's top banks.
Moritz Erhardt, collapsed at his London home in
Bethnal Green on Thursday, after allegedly working until 6 a.m. for three days
in a row at Bank of
America Merrill Lynch's (BofA) investment banking
division. The cause of his death is unknown.
London's Metropolitan Police confirmed they are not
treating the death as suspicious, and said the post-mortem has yet to be
completed.
Attracted to the glass towers of finance in London, New
York and Singapore by the prospect of securing a full-time job and hefty wage,
future "masters of the universe" often face 20-hour days in some of the most
adrenaline-soaked offices on earth.
Weekends at work and meals in the office are par for
the course with anecdotal reports of the "magic roundabout" where interns get a
taxi home after dawn and leave it waiting while they have a quick shower and
then return to work.
But in the wake of Erhardt's death, a group that
advises graduates hit out at employers who allow young interns to work punishing
hours. In addition, recruitment agencies that deal specifically with interns
called for an independent body to support young people working in the finance
industry.
"Internships should not be an initiation process of low
pay, tortuous hours and tasks designed to push the young person to their limits,
even of health. They should not be exploited because they're the intern," said
Felix Mitchell, co-founder and director of Instant Impact, an intern recruitment
agency in London.
A Bank of America spokesman said the bank was waiting
for the facts about Erhardt's death before deciding whether to review its
internship program.
The term "internship" currently has no legal status in
the U.K when dealing with pay or working conditions, so firms are free to design
their intern programs.
But CIPD, the U.K.'s largest human resources body, said
its policy guidelines will likely be changed after this incident to include
suggested working hours for interns.
"What it shows is that young people need a bit more
support," Katerina Rudiger, head of skills and policy campaigns at CIPD, told
CNBC. She added that young people were desperate to work hard, sometimes for
free, in order to earn a job in this difficult economic climate.
John McIvor, BoAML's head of international
communications, said Tuesday he could not confirm the circumstances surrounding
Erhardt's death or his working hours. The bank said it was deeply shocked and
saddened by the death.
"The whole point about internships is to give students
a positive experience and to get to know our firm, and us to know them well, so
we can work out who would be the best fit to join the company full-time after
they graduate," McIvor said.
Fierce competition
A former
employee at BoAML, who asked to remain anonymous, said interns tended to compete
with each other in order to prove themselves to bosses in the hope of gaining a
permanent job when graduating. Long hours were common at most banks, he said,
especially the larger U.S. banks.
Other former interns agreed, saying the culture of
long-working hours was widespread. They were thankful this current case might
put the work environment at banks in more focus.
A former intern at another investment bank said he had
worked a hundred hours a week as an intern at the bank, and that first year
graduate analysts worked the same hours, before cutting back to about 80-90
hours per week in their second year.
Another former intern at an investment bank dismissed
Erhardt's story as "blown out of proportion."
"I mean three all-nighters is definitely awful, but I
did that at university and everyone has done it at university," she said, adding
that she worked around 70 hours per week as an intern, leaving work at 11 p.m.
on average.
CNBC contacted several investment banks, but they all
declined to comment on the subject of working hours for interns.
However, Richard Payne, a professor of finance at Cass
Business School, said the lure of a prestigious and lucrative career and
"glittering rewards" incentivizes interns to work long hours.
"Interns are in a culture where time spent at your desk
is often, probably wrongly, equated with productivity and dedication," Payne
said. "Combining these, leads to an intern wanting to stay that little bit later
than his or her fellow interns, and this competition to stay late may be
exploited by an employer."
The death of an intern working at the London offices of
Bank of America Merrill Lynch has prompted calls for city firms to take more
responsibility for the ambitious graduates who push themselves to the limit to
secure jobs at the world's top banks.
Moritz Erhardt, collapsed at his London home in
Bethnal Green on Thursday, after allegedly working until 6 a.m. for three days
in a row at Bank of
America Merrill Lynch's (BofA) investment banking
division. The cause of his death is unknown.
London's Metropolitan Police confirmed they are not
treating the death as suspicious, and said the post-mortem has yet to be
completed.
Attracted to the glass towers of finance in London, New
York and Singapore by the prospect of securing a full-time job and hefty wage,
future "masters of the universe" often face 20-hour days in some of the most
adrenaline-soaked offices on earth.
Weekends at work and meals in the office are par for
the course with anecdotal reports of the "magic roundabout" where interns get a
taxi home after dawn and leave it waiting while they have a quick shower and
then return to work.
But in the wake of Erhardt's death, a group that
advises graduates hit out at employers who allow young interns to work punishing
hours. In addition, recruitment agencies that deal specifically with interns
called for an independent body to support young people working in the finance
industry.
"Internships should not be an initiation process of low
pay, tortuous hours and tasks designed to push the young person to their limits,
even of health. They should not be exploited because they're the intern," said
Felix Mitchell, co-founder and director of Instant Impact, an intern recruitment
agency in London.
A Bank of America spokesman said the bank was waiting
for the facts about Erhardt's death before deciding whether to review its
internship program.
The term "internship" currently has no legal status in
the U.K when dealing with pay or working conditions, so firms are free to design
their intern programs.
But CIPD, the U.K.'s largest human resources body, said
its policy guidelines will likely be changed after this incident to include
suggested working hours for interns.
"What it shows is that young people need a bit more
support," Katerina Rudiger, head of skills and policy campaigns at CIPD, told
CNBC. She added that young people were desperate to work hard, sometimes for
free, in order to earn a job in this difficult economic climate.
John McIvor, BoAML's head of international
communications, said Tuesday he could not confirm the circumstances surrounding
Erhardt's death or his working hours. The bank said it was deeply shocked and
saddened by the death.
"The whole point about internships is to give students
a positive experience and to get to know our firm, and us to know them well, so
we can work out who would be the best fit to join the company full-time after
they graduate," McIvor said.
Fierce competition
A former employee at BoAML, who asked to remain anonymous, said interns tended to compete with each other in order to prove themselves to bosses in the hope of gaining a permanent job when graduating. Long hours were common at most banks, he said, especially the larger U.S. banks.
A former employee at BoAML, who asked to remain anonymous, said interns tended to compete with each other in order to prove themselves to bosses in the hope of gaining a permanent job when graduating. Long hours were common at most banks, he said, especially the larger U.S. banks.
Other former interns agreed, saying the culture of
long-working hours was widespread. They were thankful this current case might
put the work environment at banks in more focus.
A former intern at another investment bank said he had
worked a hundred hours a week as an intern at the bank, and that first year
graduate analysts worked the same hours, before cutting back to about 80-90
hours per week in their second year.
Another former intern at an investment bank dismissed
Erhardt's story as "blown out of proportion."
"I mean three all-nighters is definitely awful, but I
did that at university and everyone has done it at university," she said, adding
that she worked around 70 hours per week as an intern, leaving work at 11 p.m.
on average.
CNBC contacted several investment banks, but they all
declined to comment on the subject of working hours for interns.
However, Richard Payne, a professor of finance at Cass
Business School, said the lure of a prestigious and lucrative career and
"glittering rewards" incentivizes interns to work long hours.
"Interns are in a culture where time spent at your desk
is often, probably wrongly, equated with productivity and dedication," Payne
said. "Combining these, leads to an intern wanting to stay that little bit later
than his or her fellow interns, and this competition to stay late may be
exploited by an employer."
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