This Friday, Goldman Sachs announced their future plans to give guaranteed promotions to their junior analysts in an attempt to keep them for longer (source).

Jobs at famous companies on Wall Street are notorious for their “all-nighters and 100-hour work weeks”. While I’d definitely be proud to work with a big name like Goldman Sachs, I’d probably have to quit if my body starts to shut down after a couple sleep-deprived months. Looking at this article, I think many of GS’s young employees feel the same.

As we learned in our management lessons, high employee turnover is a waste of company resources; the benefits from time and money spent on employee training do not stay in the company long enough to give sufficient returns. In Goldman Sachs’ case, it was even noted that defected employees often found work at “hedge funds and private equity firms”; in essence, their resources are migrating to competing firms!

Although Goldman Sachs seems to be competing fairly well over the past 5 years (at least, from looking at its stock trends), GS probably noticed that employee turnover rates were high, and it was losing precious productivity because of it.

From a Human Resources standpoint, the well-being and satisfaction of a company’s employees not only affects productivity, but also the company’s ability to hire good employees in the future. High quality human resources would not wish to work at companies known for bleeding out employees, if there are other options available.

I think it’s a good move for GS to have “[interviewed] hundreds of junior employees at the firm” about their gripes. This shows that the company is reflective, and willing to effectively find ways to target the root causes of their junior employee turnover rates.

As investment banking division co-head David Solomon said, GS needs to “make sure [they’re] doing all the things [they] need to do to be as competitive as [they] can be”. The tangible results of the new policy has yet to be released publicly; however, the willingness to make changes alone is already a step in the right direction.