The banking trainees struggling to survive on small salaries
It's summer internship season in investment banks. This week and next, summer analysts start arriving at banks in London and New York City, with a view to converting ten weeks over the summer into a permanent job when they graduate.
Summer interns in investment banks are well paid. They receive a pro-rated version of first year analyst salaries and now that most first year analysts are on $100k+ in New York City and £70k in London, that means around $20k for the summer. However, not every trainee in an investment bank is an intern. At French banks in particular, a sub-category of trainees is paid considerably less.
Some of those trainees are to be found at Société Générale in London. Known as trainees rather than analysts, and often members of the bank's VIE ("volunteer for industrial experience") programme, they typically join the French bank on an 11-month contract and are paid a reduced rate of just £32k ($41k) a year, with no bonus.
SocGen declined to comment on its trainee programme, but multiple current participants complained to us that pay is low and hasn't increased for many, many years. "Trainee salaries have been stuck at £30-£32k for the past decade," says one insider. "We're doing everything that a first year analyst does, but are being paid £18k less." Based on off-cycle internships at other banks, the going rate should be closer to £50k, another trainee at the bank told us.
Unlike summer analysts, trainees at French banks are hired all year round. Like summer analysts, they can hypothetically convert the traineeships into a full time job, although this rarely happens and most trainees say they are forced to look for analyst jobs at other banks instead. This too can be difficult, as rival banks don't understand the concept of trainees and don't always accord credibility to the experience gained though the French banks' programmes. "It's very difficult to get an offer from the trainee programme - there's no headcount," one SocGen trainee in London tells us. "- I'm trying to get a graduate position with more exposure at another bank."
Many of the trainees we spoke to were hopeful that the French bank will be persuaded to increase their pay. For the moment, they're making savings and being subsidized by parents. "My parents give me €300 a month to help out," one trainee told us. "I pay £900 rent for my flat, and €800 for my student loan. It's difficult to live in London on this amount, and when I compare my lifestyle to friends at other banks, I can afford to do far less at the weekends." Another London trainee said inflation is making living on £32k even more of a challenge: "I'm trying to cut spending, there's nothing else I can do. I spend £500 a month on both food and travel."
There are some advantages to the trainee programme though. Although trainees work 10 to 12-hour days, they don't work the sorts of 80-100 hour weeks associated with analyst programmes at US investment banks. They also get a good understanding of what jobs in places like the trading floor involve. "From what I hear, people on my team are much nicer than at other banks," says one junior. "They allow me to shadow them, even if they don't actively teach me much. I'm gaining a lot of knowledge that couldn't be taught in a classroom."
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