Goldman Sachs’ recent move to provide its senior employees unlimited vacation time has been criticised by critics who claim the policy has a hidden goal.
The change in policy was announced on May 16 in response to many concerns about the bank’s lengthy hours and work-intensive atmosphere.
Due to the fact that those employees are no longer accruing vacation days, the new policy no longer compels Goldman executives to reward senior bankers for unused vacation time below the 15-day threshold.
In the past, if employees had vacation days they did not use, the bank had to pay them for those hours. Now, the bank does not have to pay them anything.
Combined with the company’s long rumored intense work environment, analysts say the policy will likely see under-pressure staffers still work long hours, while brass continue to raise their own bottom lines.
‘This was completely driven by financials,’ Veehtahl Eilat-Raichel, cofounder of Sorbet – a firm that buys unused vacation days from companies and puts the cash value on prepaid cards – told The New York Times of the move.
According to Eilat-Raichel, the unlimited paid time off package is ‘positioned as if it’s an amazing benefit for employees, where in fact it actually is really bad for employees and amazing for employers.’
The CEO went on to cite how in the past employees had the benefit of being reimbursed for unused time off – a sentiment that spurred her to start Sorbet in 2019.
Renowned Wall Street analyst Mike Mayo, who currently serves as the managing director and head of US bank research at Wells Fargo, agreed with Eilat-Raichel’s assertions.
‘It sounds psychologically soothing, and it’s part of Goldman’s cultivating a gentler and softer Goldman image,’ Mayo said.
‘The reality is it’s not going to make any difference,’ he added.
‘It’s like telling a restaurant owner you can have unlimited vacation – will that change how the restaurant owner works?’
Moreover, the policy only applies to senior bankers, with junior employees still subject to a cap. It did, however, provide them with two additional vacation days, to a total of 17. They will also not be paid for unused days under the new guidance.
The bank announced the plan with hopes it would improve staff ‘wellbeing and resilience,’ providing time off to ‘rest and recharge,’ a statement penned by Goldman CEO David Solomon asserted.
The ‘flexible vacation’ scheme came into effect from May 1 to allow senior staff ‘to take time off… without a fixed vacation day entitlement’, the memo said.
It added that every employee will also be expected to take a minimum of 15 days leave per year from next January, with at least one week of consecutive time off.
Goldman, the first major financial institution to bring in the policy, is notorious for its long-hours culture.
Last year junior staff begged to work just 80 hours a week amid complaints ‘inhumane’ expectations were leading to mental health issues.
In March, more than 10 staff in their first year at the company reported working around 98 hours each week, according to posts on eFinancial Careers.
Chief executive David Solomon said that the company is taking complaints from junior staff about workload and hours ‘very seriously’.
Unlimited holiday policies have become popular with some firms, including Glassdoor, LinkedIn and Netflix, as a way to stop burnout among staff.
Goldman is one of a handful of financial institutions to get staff back in the office five days a week – Mr Solomon described working from home a ‘temporary aberration’.
He said that being in the office is ‘critical’ to company operations
On February 1, only half of the company’s 10,000 employees showed up to the New York City headquarters when offices reopened. Workers were reportedly been given more than two weeks notice to prepare for the return.
Mr Solomon has repeatedly argued that remote work ‘is not ideal for us, and it’s not a new normal.’
He has maintained his distaste for remote work throughout the pandemic, arguing that one of Goldman Sachs’ strengths is its network of staff collaborating together to serve clients.
He believes that working from home inhibits relationship building and growth.
‘The secret sauce to our organisation is, we attract thousands of really extraordinary young people who come to Goldman Sachs to learn to work, to create a network of other extraordinary people, and work very hard to serve our clients,’ he told CNBC in March.
‘Part of the secret sauce is that they come together and collaborate and work with people that are much more experienced than they are.’
Although he acknowledged that some businesses have made remote successful, he doesn’t believe that is the best operating model for his company.
‘I do think for a business like ours which is an innovative, collaborative apprenticeship culture, this is not ideal for us and it’s not a new normal,’ he said.
Goldman Sachs reported its best years ever over the past two years, with the company recording a profit of $21.6billion in 2021.