WSO Podcast| E230: Garbage PE Associates - Layoff Lessons - Promoted Too Early? | Weekly Wrap Up #2
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Topics this Week:
0:00 Are PE Associates Garbage These Days?
4:15 Lessons From GS / MS Layoffs?
7:48 How Do You Manage Sleep Deprivation?
12:13 Being Promoted Too Early
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WSO Podcast Episode 230 Transcript:
Patrick (CEO of WSO): [00:00:04] Welcome to the WSO Weekly wrap up where I talk with my team about the five most trending discussions in the Wall Street Oasis community. Enjoy. All right, everybody, welcome to the second weekly wrap up call We are going to quickly go through, I think, the top four this week over the next kind of 20 minutes. Just try to cover our opinions or thoughts of some of the most controversial and interesting discussions happening in on the forums. So, Matt, go ahead and kick us off.
Matthew: [00:00:33] Perfect. All right, guys. Excited for this week here. We got four interesting topics. First and foremost here, is it just me or Associates getting garbage these days within this topic? We saw some pretty interesting responses here. They're highlighting that this problem is especially prevalent within the last two classes of hires and that there's been a lot of dud associates. Now again, but I think it's just from the we're assuming that might just be aggressive, borderline or even just hostile attitude from some of these individuals that are joining the firm. So, Pat, lead us off here. What what are your thoughts on on the quality of P Associates?
Patrick (CEO of WSO): [00:01:08] I mean, we've been hearing a lot of this not just in private equity, but investment banking. A lot of these kids coming in, I think, never really had the in-office kind of experience and the mentorship that a lot of people get in banking. And so they're hired. They come out of undergrad, they're basically given a job almost two years ahead in advance, so they have less incentive to work hard in banking, number one. Number two, they don't have those modeling skills are coming in. They don't have that mentorship. They don't really if they're forced to go back in the office, it's a little more awkward. And yeah, a lot of them are just don't have their heart in it. They've been following kind of the path and they find themselves in the promised land of private equity but not really wanting it. And so I think we're seeing a lot of people complaining about this. And we did see some people kind of taking a different angle. I don't know if Nabila, you want to talk about that or Matt.
Nabil: [00:02:00] Yeah, I mean, it depends, really, right. Like, I mean, the other side was that is the manager like the one who's being an asshole or whatever? I don't know really, but like B and I b like, usually are known for having these hard bosses, right? The ones who push you around? I guess. So. I wouldn't, like, lean in too much and say as boss, I mean, yeah, I mean, that's expected.
Patrick (CEO of WSO): [00:02:24] Investment bankers, they tell you when you can go to the bathroom, private equity, they kind of leave you alone. But like it's more cutthroat in a way. It's like a more quietly threat.
Matthew: [00:02:33] And I think and I think that's the thing, because there's not those guardrails there. And and a lot of these people coming from IB don't have those battle wounds, so to speak, because they're either getting getting the offer to join PE within. We've even heard Pat, from some of the calls that we've had with our with our business clients within like eight months. Some of these kids who already gain potions sometimes even like if it's a top Ivy League school, they're getting offers for PE before they even start their IB jobs. So I think it's like the lack of battle wounds, you know, or just the failures that come from a new job in IB That is inevitable. And you know, just not learning those, those skills and those traits that obviously then don't get passed on throughout other other careers you may have, of which PE is typically one of them.
Sara: [00:03:21] Exactly. Do you think that a joiner should have the opportunity to shine at work and to handle challenging assignments and the project that allowed them to to take more responsibility and to demonstrate their abilities?
Patrick (CEO of WSO): [00:03:38] I think so, yeah. Ideally, yes. I think the issue is what the what the VP is complaining about here is that they don't have they have in title like an entitled attitude, but they don't actually have follow through.
Matthew: [00:03:49] Well, that's Gen Z for you, Pat.
Patrick (CEO of WSO): [00:03:52] Are you part of Gen Z, Matt? Aren't you part of Gen Z?
Matthew: [00:03:55] No, no, I'm. Oh, you're out of it. Yeah, I'm definitely not a Gen Z.
Patrick (CEO of WSO): [00:04:00] You're close though, right?
Matthew: [00:04:01] 94. Yeah. So not Gen Z. Z.
Patrick (CEO of WSO): [00:04:05] Uh oh, Bill.
Nabil: [00:04:07] Yeah, 97.
Patrick (CEO of WSO): [00:04:10] So anyways, so want to. Yeah, we can move.
Matthew: [00:04:12] Yeah. Nonetheless. Great. Great combo there guys. So second trending topic that we were seeing in the forums this week, what are the key lessons from Goldman Sachs and Morgan Stanley Layoffs? Again, what we've been seeing for some some comments from some some top, top users that these layoffs were not performance related at all and they also weren't receiving bonuses after working pretty diligently for 12 months straight, which could definitely be frustrating. So, Pat, you want to give your your insight on that one, too.
Patrick (CEO of WSO): [00:04:43] Yeah. First off, they're never going to tell you it's performance related because they're going to try to lessen the blow and make it feel a little bit better. Number two, in terms of like the the bonus is not getting paid out. That does really suck because even though bonuses are not required in banking, it's one of those ones where everyone knows you're putting in the super long hours for that bonus and for that thing. So I think it's pretty it's pretty cold to do it right before or at least not pay out like a low bonus to them or something lower, like to pay a zero or what they call a donut in the industry is rough.
Matthew: [00:05:20] I know it's not. I had no bonuses are never like it's never a contractual obligation. But I will say I think within the banking realm, bonuses are most common. You know, other jobs, people do get bonuses, but that's more like if the business really crushes it. Like if you're in a retail business or whatever other career you may have. I think within banking specifically, it almost is like bonuses are entitled. So I think if you are putting up a donut for for people, definitely this is people often it's going to stick with with that firm for a bit because the industry is small from what we know.
Matthew: [00:05:54] And.
Matthew: [00:05:55] We're having our calls or just interacting in the forums. There's a lot of people know, a lot of people within Wall Street. Wall Street's big, but it's also very small.
Patrick (CEO of WSO): [00:06:02] I think people got so pissed they even put something in the forms like, Is Goldman even a bulge bracket anymore.
Patrick (CEO of WSO): [00:06:09] Do you think?
Nabil: [00:06:10] A lot of people. Go ahead. Yeah. Do you guys think they're able to, like, pull it off because of the brand name? It be political? I mean, it's Goldman and Margaret. I mean, I'm so like, do I ever. People still keep applying. Still want to go in for the brand name.
Matthew: [00:06:25] Yeah. I think that won't. I mean, one bad year of maybe no bonuses or won't do that much.
Patrick (CEO of WSO): [00:06:33] Yeah. The layoffs are everywhere. Like, everyone's taking advantage. Even Google and the tech side is, like, taking advantage. Yeah, just like using this.
Matthew: [00:06:41] Well, you know, a good response I actually saw is it's all about risk reward. I think at the end of the day from a career level. So obviously in good times bankers get paid boatloads of money, but then in bad times, obviously, again, I don't agree with the zero, but maybe like what you said, a smaller bonus just to at least acknowledge some work. So even if it's like 15% of what your full bonus would have been, whatever. Yeah. But also, I think people do have to take a step back and understand that there is the risk reward. You know, you're in a high risk career.
Patrick (CEO of WSO): [00:07:12] So larger. I mean, what do you think about the severance? I mean, I think they all got pretty good severance. It's kind of like a bonus being paid out over several months anyways. But yeah, I guess it just the optics of it look bad when it's a zero and it's like, Oh yeah.
Matthew: [00:07:27] And also just coming off the back of what, a 12 year bull market when anything, everything's been good. So a lot of people forget what it was like and I was seven and zero eight and then in tough times prior because we haven't had a lot of tough times.
Patrick (CEO of WSO): [00:07:41] For a long time.
Matthew: [00:07:42] For the past decade or so, but great. Okay, cool. Let's let's move on, guys. Let's keep it keep it fresh here. Third trending topic of the week, Sarah, this one is coming your way. Here Are the hours in banking dangerous and how do you manage sleep deprivation? Some people were mentioning in the forms. Again, that is it asking the question, which is absolutely ludicrous. Is it physically dangerous to sleep for less than 5 hours a week? Sorry, 5 hours a day during the during the week, and that some people are staying up typically to 3 to 4:00 AM on a daily basis. So, Sarah, what are your thoughts on on how to manage sleep deprivation? And are the hours overall dangerous in banking?
Sara: [00:08:22] I think no one can persist for years if this is the case. I think they should maintain work life balance and be more organized in their tasks to work efficiently.
Matthew: [00:08:36] Definitely easier said than then, I would say. Panel. You spent a couple of years in banking. What were some tips that you could provide everyone?
Patrick (CEO of WSO): [00:08:43] I had a pillow at my desk. I would sleep under my desk. I'm not joking when I needed it, even to the point where sometimes when I was waiting for turns at like two or three in the morning, I'd take my pillow and go into one of the MD's offices and lay down because one of them had a couch.
Matthew: [00:08:57] And so nicer offices.
Patrick (CEO of WSO): [00:08:59] Yeah, but you got to you got to put your ringer. I'd have the door open. I put my ringer on my phone all the way up on both my cell and my and my office phone so that I'd wake up if it started ringing.
Matthew: [00:09:10] Did anybody ever come in and catch you sleeping on the couch?
Patrick (CEO of WSO): [00:09:14] No.
Matthew: [00:09:14] Or has that ever happened to anyone else at the firm?
Patrick (CEO of WSO): [00:09:16] No, but I have slept in a stall, too, and it's toilet just sitting on the time and not even going to the bathroom. Just. Yeah, I was. Sleep deprivation is tough. I remember I worked at 40, 41 hour day, so basically was in the office for 41 hours straight. And then usually, usually the bad days were like 20 hours straight. 30, 30 hours is really bad. But one time I didn't go to home for like two all nighters in a row and that at that point, by the end, you're kind of delusional and like you act like a drunk person. You have the impulse control of a drunk person and you so it's like, you know, you can imagine how useful you are at that point. And everyone's like, Just go home. I don't know what your thoughts are. Nabeel Bill works pretty long hours. He stays up to insane, so maybe you.
Nabil: [00:10:04] Can get it, get some naps, right? Like during the day. That's what works for me always. Just like whenever you can get those small naps. And so you're like, a little fresh. Yeah, but then, yeah, even if you can't get like, the long eight hour sleep or whatever that people keep talking about.
Matthew: [00:10:19] I've actually I've jumped on that trend, that deal with the naps I've been taking. I do like a nice 20, 20 minute power nap and been doing it now for maybe about a year. I love it. I typically do a little bit later in my evenings because then it gives me that extra juice at night to keep me in trouble.
Patrick (CEO of WSO): [00:10:36] Getting into bed though, if you if you do that late nap.
Matthew: [00:10:40] Uh, no, actually. Well, I mean, I go to bed pretty late, but I think that's just. I'm one of those people. I've actually become pretty productive in the later hours of the night, because I think it's just quiet. It's just to myself. And I could really pump out some good work then. Yeah. So I think that's why I do take that nap at that time, because for me, East Coast, I'm probably up until 130. Realistically, on average. But again, those 2 hours at night, they're 3 hours a night are my time to grind. And I rather sacrifice the evenings where it's a little bit more seeing people, whether it's going to the gym more lively or it's hard to stay focused. But yeah, naps are huge. Hubbard Anyone finding time to exercise? I know that's harder because it takes more time on your day, but where you exercising at all as a banker, I know a lot of people say when you become a.
Patrick (CEO of WSO): [00:11:27] Banker as a banker and not much as a banker. Not much. Just so diet's super important. Stay away from the simple sugars and unfortunately seamless. I don't know if it's still seamless or GrubHub or whatever. It's it's tough because you're getting good meals delivered to you every day, Every day.
Matthew: [00:11:44] And we're paying for it.
Patrick (CEO of WSO): [00:11:45] And we're paying for it every night because you're there, you know, eight or nine, whatever the cutoff is. So it's tough. You're getting like steak and Thai food and like, you know.
Matthew: [00:11:56] Actually that one, that one coworker that tempts you, you try to be healthy. But then there's that one person that went out the door and you see the food they're getting and you don't want to grab a salad and be that guy or that girl anyways. All right. Last last topic here, guys, before we wrap it up. So the fourth and final trending topic of the week, maybe this one's going to be coming your way here. Feels like I'm being promoted too early, you know, from an outside or that someone be like, What do you mean? Like obviously take the promotion, but obviously there could also be some cons with it and that was highlighted in the forums as well. So specifically, one individual made made reference that he's had one and a half years in audit only, has done one year in consulting and is a ready game thrown into a double promotion where you typically need about four years of experience as a consultant to get so specifically becoming a senior consultant now and this is at a top 20 consultancy. So obviously he's questioning is this a little bit too premature for him to be? What are your thoughts on this here?
Nabil: [00:12:57] Um, I take, like, a balanced approach. It depends on person. It depends on the team, to be honest. Like, if the good thing is, like, if someone trusts you to get promoted, like, if you are whoever your boss thinks you are good enough, then you don't have to worry too much. There's something in you. But then there's the other part where you're like, advancing too fast, where you might just crash and burn. Like the pressure might just be too much, especially if you don't know what that new role entails. Like, imagine you. It's more important to ask the right questions like What would you be doing? And then kind of measure yours. Honestly, just go back to the drawing room and think, Do I have the skill set to take on this new role? And if you don't like, kind of just avoid it and not take it. But then at the same time, if, you know, like, like you could ask your boss itself, like be like, hey, what are you what do you think? Like, why do you think I'm going to fit that role or whatever? And if it's a big firm, usually it's someone vouching for you. So you'd have to find out who's vouching for you and then probably talk to them. It could be a team leaders. It could be people in your team who probably gave you good ratings. That's how it usually works. So then talk to people and kind of find out what your strengths are and and why you would fail if you had to fail and address those points. Pretty much.
Matthew: [00:14:07] Do you guys think it looks bad if you decline the promotion? How do you think the optics look on that? Right. Because I agree with you and it'd be all right. But my playing devil's advocate here is also at times businesses like they can be cruel. And what I'm trying to say is like at the end of the day, a lot of people say, you know, employees are just expendable. If you know, they'll they'll fire you the next day. Your seat's filled again and so are they. Is this a promotion coming on the back of. They're desperate. They need someone to fill that. And it might not even be that the boss or the person in charge that really does think you could succeed. They're just thinking, Hey, we need to put someone in the seat here. Let's give it a shot. And if you fail, they'll they'll can you and they'll put someone else in seat there. Right. So I started turning especially large corporates that that personal or that that they actually do care for large corporates I don't think exists for small businesses startups. Of course it does I do feel it. So what do you guys think on that? Like is it bad to say no? And is it even should you be coming in the angle where you're thinking, you know, they're actually trying to do something good for me, or is it more for their self interest in the business of self interest?
Sara: [00:15:16] I don't know if opinion. Mom. I think it's crazy if someone refused to be promoted. I think he'd just have to work hard and adjust.
Patrick (CEO of WSO): [00:15:29] Yeah, I think it's a really tough one, I think. I think once you're at a large corporate, it is a little bit more scary. I think what you'd probably want to do and it's kind of like threading the middle here, is saying, well, you know, I feel like it's a little bit of a reach for me given my skill set. What if we give me six months? You know, give me let me say, start as a consultant, but let me like, can you mentor me and try to find somebody to really kind of hold your hand because, you know, theoretically, you know, the job, if you're seeing kind of what the senior associates or senior consultants have already been doing, you know, in a few projects or if you engagements in consulting, you should be picking up some of that. And usually it's just a little bit more like client facing a little more interaction. But if you're like if you're freaked out and you have no clue what you're doing, for sure, you should just be like, Yeah, I'll take the double promotion and try to like, try to just put it off a little bit and be like, Hey, I think I'd be better served to have a mentor or another senior consultant that's been in the role for two or three years. Can I shadow them on a few engagements? Can I do all that so that you're kind of starting to kind of visualize yourself in terms of what you need to do to manage? Because those roles, those middle, those middle manager roles are really hard. They're really hard because you're on top of deliverables, you're on top of managing a junior team suddenly.
Matthew: [00:16:47] Below you and then client facing as well.
Patrick (CEO of WSO): [00:16:49] It's super hard. Yeah. So like you're juggling a lot, so you have to have a lot of different skill sets. It's not just suddenly about being good in Excel and PowerPoint and.
Matthew: [00:16:58] Just work, not process driven anymore. Now it's more people say it's everything.
Patrick (CEO of WSO): [00:17:03] Yeah, it's.
Matthew: [00:17:03] Everything. Yeah, exactly. Exactly. Hybrid of both. Well, I would say this though, honestly, kudos for this guy because obviously we come in with a double promotion. It's probably a lot more money. So at least he's putting some some thought right behind it and not just seeing dollar signs and just jumping at it. At least he's being a lot more methodical and thoughtful with his career. I do always say if you're going to bet, bet on yourself. Right. So, I mean, yeah.
Patrick (CEO of WSO): [00:17:27] So Sara would take Sarah would say, screw it, just take it and. Right. And just try to run as fast as you can.
Nabil: [00:17:33] But then the fact that you have to ask the question also, like kind of gets you to the point where you're like, hmm, maybe not. That's probably the right answer. Just because if you have to, if you're not confident, you're probably are not going to make it.
Matthew: [00:17:46] Because he's looking he or she's looking for validation from other people. But I think he knows the answer deep down inside.
Nabil: [00:17:52] Yeah, hopefully. Yeah.
Patrick (CEO of WSO): [00:17:54] It's hard.
Patrick (CEO of WSO): [00:17:55] You see this in like more lean, firm, like larger corporates, like it's tough, but more lean firms where like, for example, when I was at Rothschild, like my associate got fired and suddenly I was as a first year analyst, I was working directly with the VP. It's funny, that associate got fired. He was an HBS grad, like it was disaster. He thought he was like God's gift and had no banking background and it was a bad name. But yeah, the VP was great. He kind of took me under his wing. He was like basically invested in me to learn and I my skill is just like accelerated. I was able to just churn out a ton more work, help run the deal, not run the deal, but help kind of keep things afloat. Since Amy just basically ran the deal with no associate. So it was a lot of work, but it can be done.
Nabil: [00:18:37] Is that why you had those long hours?
Patrick (CEO of WSO): [00:18:39] Yeah. I also worked with the specific that was notorious for long hours, you know, 3:00 am, 4:00 AM turns four like footnote, like edits to footnotes and commas in the footnotes to I was doing calls at four, I'm at my cube. He was like page number 233.
Matthew: [00:18:58] He's probably whispering, Yeah.
Patrick (CEO of WSO): [00:19:00] He's at home. He's like, There's good days. He's like, No, number seven. We missed a comma on this word. And I'm I remember thinking to myself, like, Oh my gosh, that's brutal. Wow.
Matthew: [00:19:14] Yeah. All right, Juan, on that note, I think that was a great column. Well, guys, keep this one nice and short here, but nonetheless, appreciate you, Patrick, Sarah and Bill is all great having this conversation. And we'll be back next week, guys.
Patrick (CEO of WSO): [00:19:26] And thanks to you, my listeners at Wall Street Oasis, if you have any suggestions whatsoever, please don't hesitate to send them my way. Patrick at Wall Street Oasis dot com. And till next time
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