For some time now, Goldman Sachs has served as an important bellwether for the financial services sector, and, to a lesser extent, the economy as a whole. Goldman Sachs is synonymous with high-end financial clients—according to investor documentation on the firm’s website, you need about $10 million in assets just to open an account—and trouble at the top of the financial structure inevitably is felt throughout all strata of the economy, sooner rather than later. As goes Goldman Sachs and their clientele, so goes the nation, for better or worse—at least according to some. Business leaders in the financial world who subscribe to this notion that Goldman Sachs is a reliable indicator of the state of finance more generally are understandably nervous today, as the firm heads into 2023 rolling back on hiring.
Jobs at Goldman Sachs are incredibly competitive, with the company receiving about a quarter million applications each year. They are about to get even more competitive in 2023, as the company significantly scales back its plans for hiring.
Recent Job Growth and Hiring at Goldman Sachs
The current hiring slowdown can best be described by the numbers, but we’ll need to contextualize Goldman Sach’s recent history to do so:
- Over the past 5 years, Goldman Sachs has had a 39% increase in total employees.
- In 2021 and 2022, job growth at the company remained strong in spite of Covid-19-related challenges globally. Goldman Sachs added about 10,000 employees, with over 6,000 added last year alone.
So, what’s happening to this strong positive growth trend?
The Future of the Goldman Sachs Workforce
In a third-quarter wrap-up call to investors, the firm’s current CFO Denis Coleman was forthright about the trend ending—even reversing—in the immediate future, stating that the company was already in the process of reducing the “velocity” of new hiring.
These comments seemed to support and reiterate comments made previously in the second quarter investor call, wherein Coleman initially warned of the hiring slowdown. He revealed that the company would not be immediately replacing those who left the company through “attrition”, which presumably refers to employees who leave the firm voluntarily.
Per the Q3 call, the Goldman Sachs hiring policy will focus on being “nimble” and “strategic”. While these terms were not explored in detail on the call, they might refer to:
- Fast onboarding time (using technology to go from posting a position to hiring a candidate in a matter of days, rather than weeks)
- Smarter targeting and recruiting to proactively find ideal candidates for key roles
- Continuing to let roles disappear through “attrition” and fill only those empty roles which are crucial for core operations
- Expanded use of contractors and temporary employees to make the workforce more “nimble” in the sense that it can be scaled up and down in size as needed
Without further clarification from the Goldman Sachs brass, however, this is mostly speculation. It remains to be seen if the hiring slowdown will snowball into a hiring freeze, or even layoffs, in the future.
What Does It Mean for You?
There’s a good reason that some experts in the financial sector look at Goldman Sachs as a bellwether. Other high-end bankers already appear to be on a similar track, with Wells Fargo’s workforce shrinking nearly 6% over the last year, and high-end investor Blackrock posting few, if any, open jobs of late.
While it is useful to be aware of stories and larger trends in finance, the situation at Goldman Sachs does not need to scare you out of hiring the people you need to fill key roles. It definitely pays to be cautious and to think carefully about every dollar you spend in tumultuous economic times. However, a hiring rollback at someone else’s company shouldn’t be taken as a one-for-one reason to stop hiring at your own operation.
If you choose to take any lesson from Goldman Sachs’ hiring freeze, it shouldn’t be “stop hiring because Goldman Sachs stopped hiring.” Instead, it should inspire you to think carefully about your own hiring processes, and how you can also make them more “nimble and strategic”. For tips on how to do just that, you can start right here at our informative blog.