There's nothing subtle about Goldman Sachs' self-conscious makeover from stuffily elite investment banking old guard to a youth-focused, podcast-dropping, bitcoin-curious “tech firm.” After studying its own twenty-something specimens a few years ago, the bank made its newfound obsession with hot young things about as discreet as a Woody Allen production: Lloyd Blankfein started tweeting, David Solomon got into the rave scene, and HR set minimum dress code requirements a few levels below Charles Tyrwhitt.
Now behold what Goldman hath wrought:
About 50 percent to 60 percent of the company’s workforce is 30 or younger, David Solomon, who shares the president and chief operating officer titles with Harvey Schwartz, said Tuesday at a conference in Washington. Schwartz, in a podcast last week, said more than a quarter of the firm’s staff are engineers, a number “that’s likely to keep growing.”
Before we start going into the whys here (beyond the obvious need to keep at least some engineering talent from being drawn to the Oz-like allure of Silicon Valley), let's give Solomon a moment to speak from the heart:
“I love Millennials, and one of the reasons I love Millennials is Goldman Sachs is a very young workplace,” he said. “You can talk about the way the world is evolving but Millennials work hard, they care passionately about who they are working for, and they are interested in what the organization stands for and what it’s doing.”
Why does David Solomon love millennials, other than the fact that they appreciate his Skrillex remixes and tend to have solid Molly connects? Because, tautologically, they happen to work at Goldman! But why do they work at Goldman? Solomon doesn't say here, but it's clearly not just about tech. It's about cost.
One cool thing about millennials is that you can jam em all into long rows of shared desks and call it “collaborative,” so long as you throw in a “coffee bar” or something to make it seem hip. Another cool thing is that they make for a cheaper replacement of more senior employees. See this slide from a presentation on Goldman's evolving business strategy, which Schwartz gave last month at a Barclays banking conference:
It's no mystery why an employee mix swinging a net 26 percent toward the junior would fall under the heading of “resource allocation” and not, like “cultural priorities” or “human capital.” Herding costly old-timers out the door while beckoning millennials with cortados and foosball is as much a cost-savings measure as it is an effort to stay cool with the youngs.
The new crop of millennial Goldmanites must be contented, but what of Goldman itself? Is there some ineffable essence (beyond old-white-guy-ness) that is lost when a bank as old and storied as GS undergoes a personnel shift as rapidly as this? Who will browbeat young interns about fetching lunch when the norm becomes trying to be “friends” with them? What happens to the local Ferragamo outlet when bonus season rolls around and all the newest MDs spring for Toms? Who will pass down the unspoken codes of conduct?