Citigroup is cutting the time it takes junior employees to advance to associate level as it dangles faster promotion in an effort to stave off poaching of its top talent in a fiercely competitive job market.
The investment banking analyst programme will immediately be cut from three to two years, reducing the expected progression time from analyst to vice-president from six-and-a-half years to five-and-a-half, according to an internal memo seen by the FT.
Citi’s move to accelerate junior bankers’ rise up its ranks comes as Wall Street contends with aggressive poaching by leading private equity firms, sparking outrage among senior industry executives.
The change brings Citi in line with Wall Street rivals, where programmes typically run for two years, and has been framed internally as a move to attract and retain talent for longer. Some firms, such as Centerview Partners, have three-year analyst cycles.
Several of the top US private equity groups had started hiring out of banking analyst programmes in the summer just after college graduation but before bank trainee classes had started work. This was a full two years before the expected start dates for these cohorts at the buyout houses.
Some of those firms last year abandoned the practice during the traditional June hiring window following industry backlash. JPMorgan chief executive Jamie Dimon warned that his bank would fire junior analysts who accepted future-dated jobs before or within 18 months of joining. It also cut its promotion timeline to about two-and-a-half years.
Wall Street peers including Citi also introduced a requirement that junior employees disclose whether they have accepted jobs elsewhere.
Banks are increasingly trying to keep analysts for longer careers instead of accepting that entry-level workers depart after 24 months.
The recent shift in attitude towards active retention comes as MBA programmes have become less attractive pools for intermediate talent. The private equity sector has also matured into a crowded asset class with fewer entrepreneurial and advancement opportunities, as it struggles to earn big profits that had typically flowed down to pay for junior talent.
Historically, investment banks have at times adjusted their promotion paths, depending on market conditions. During the late 1990s dotcom boom, banks first allowed analysts to ascend to associate after just two years to stem defections to internet start-up companies.
In the pandemic-era dealmaking frenzy of 2021, Wall Street firms accelerated advancement and perks as trainees complained about heavy workloads while working from home.
Citi will also end its fixed-term employment provision that typically applied to investment banking analysts in North America, according to the memo, meaning those employees no longer have a pre-determined contractual end date. The change to the duration of the investment banking analyst programme was first reported by Bloomberg.
Banks are also building and buying AI tools to reduce the grunt work junior workers do on spreadsheets and pitch books, which may make analysts more likely to stay on given the chance to do more interesting client-facing work.