Sacrifice in the City

03 Dec Sacrifice in the City

The death of 21-year-old Bank of America Merrill Lynch intern Moritz Erhardt sent shockwaves through the city, highlighting a dark culture of sacrifice and exploitation, writes Millie Cooke

Moritz Erhardt, 21, interned at Bank of America Merrill Lynch before his death in August last year

Moritz Erhardt was just a week away from completing his internship when he was found dead at his east London residence last summer. Reports that he had worked for 72 hours straight in the days leading up to his death outraged the press, and sparked a fierce debate about the city’s extremely competitive and demanding culture.

Though his death was the result of an epileptic seizure, a contemporary report from the coroner, Mary Hassell, provoked further scrutiny.

“It may be that because Moritz had been working so hard, his fatigue was a trigger for the seizure that killed him,” Hassell announced.

Following his death, Bank of America’s press office told the Financial Times it was unaware of any employees ending their internships earlier than arranged. The paper suggested this highlighted the “determination of many young people to win a passport into that world”.

To get along in the program you must be extremely driven, and the competition is exceptionally fierce. According to the BBC, British interns in the banking sector “tend to opt out of the European Working Time Directive, which limits employees to a maximum 48-hour week”.

“Young people are very desperate,” Katerina Rudiger, from the Chartered Institute of Personnel and Development, told the FT.

“This kind of economic situation can mean they’re open to exploitation, or might go the extra mile, not even because it’s being asked of them but because they think that’s what they need to do,” she continued.

However Journalist Joshi Herrmann, who highlighted the extreme pressures on interns as far back as 2011, argues that young people have little say in the intensity of their work: “I don’t think it’s what people make out of it,” he says. “That suggests that they’ve got a degree of control…and they don’t”.

Herrmann’s belief comes from years of research, including interviews he recorded this summer for The Independent. He says he spoke to students who were forced to carry on working when they tried to leave at 11.30pm, having worked until 2am the night before: “[They were] told to get back to [their] desk and carry on,” he recalls.

Former intern Jana Bakunina felt this pressure first-hand while working at Merrill Lynch in 2001. She applied for the internship during her second year at Oxford, where she studied Economics and Management. Though she says the long hours were no secret, she was thrown in at the deep end during her first week: “I thought I would go and say hello to the associate in charge of me,” she says. “It was about 5 or 6pm after the training day, and I left at 1am that evening.”

When she eventually finished they told her to come back for 10am the next morning, which was a Saturday. “I was there all day Saturday and Sunday…and then back in the office on Monday,” she says.

Many students survive the summer with only a few hours sleep each night, leading to sacrifices you might not imagine. “If you’ve got 4 hours to sleep a night…you might want an hour to get ready. To dry your hair, put some make-up on,” Jana recalls. “You know what I did? I had my hair chopped off…because I couldn’t bear that I didn’t have time anymore for long hair.”

On other occasions, the sacrifices were greater: “I had my graduation at Oxford, and I had to go back to the office that same day. My parents came all the way from Russia to see me graduate from Oxford, and I barely saw them,” she remembers bitterly. “That was not some important deal, it was just some stupid pitch.”

One week Jana suffered from extreme cramps and stomach pains. She tells me how she would walk hunched over, through the office, clutching her stomach. Getting up from the table, she demonstrates how she walked; groaning as she slowly hobbles away and then back. She later went to hospital. After treatment, she returned to work and eventually earned a full-time position at the bank. Despite the challenges, she remains positive about her experience.

Polly Courtney, a friend and contemporary of Jana’s, highlighted her own youthful exuberance in an article for The Independent: “Even before I joined the firm I’d heard tales of junior bankers collapsing from exhaustion…Secretly, I think we wanted to be a part of this strange, exclusive club,” she remembers. “We were young, impressionable and eager to please.”

Today’s students appear every bit as eager as their predecessors, which Joshi Herrmann fears will allow those in the most competitive internships to be exploited: “At the bad end, it’s using the extreme ambition of these young people, and sometimes the family pressure on them to secure a job at the end, in order to use them as relatively cheap, and very pliable labour,” he says. “At the bad end…it’s exploitative”.

For those who make it the opportunities are immense: “The rewards are big, the pay is amazingly good [and] pro rata it’s much better than people get for the first few years of work,” he explains.

Pro rata salaries of £40,000 or £50,000 mean interns can expect around £10,000 for a summer’s work. Those who prove themselves join the fold.

“Yes, it’s hard work,” he says. “But you learn a lot, very quickly. And it is very interesting, and you’re paid very well,” he continues. “But I mean, you’re catching me after a week off. If you call me at the end of a four-month stint when I haven’t had a holiday, I’ll probably just say I’m exhausted and I hate it.”

One of the greatest concerns for Bank of America following the death of Moritz Erhardt was their failure to monitor the working hours of their junior employees. Having finished his holiday James says that his work was not delegated amongst the team while he was away, but left for him to finish when he got back. He is now playing catch-up, working from 6am till 2am every day till it is completed.

Another area the bank claims to have focused on is its mentoring or ‘buddy’ system for junior employees. In the wake of Erhardt’s death, Bob Elfring, co-head of corporate and investment banking at Bank of America Merrill Lynch claimed that the bank had ‘refined’ it’s policies to use “various methods of supervision like mentors and development officers” to look after junior staff.

However, it seems their policies remain lax. According to James: “It’s kind of what the senior guy wants to make of it”. “I’m lucky,” he continues, “My mentor gets a bit involved with me, maybe once every two, three months, he’ll see what’s going on. But it’s nothing, like, serious or anything.” It remains uncertain how often the pair meet. “Yeah we’ll go for a beer…Once or twice,” he laughs. “I don’t really have a mentor,” he says. “Not a formal one.”

Jana believes the banks should do more to protect the young and ambitious, recalling how oblivious HR were during her time at Merrill Lynch: “There was a huge disconnect between what is actually happening in the office and what HR think is happening,” she explains. “You could just pop in, HR would never come around and have a look at who is doing what”.

“I’m not surprised if the culture is the same, once it’s there it’s hard to change,” she continues.

Bank of America Merrill Lynch were contacted several times regarding a statement, though the bank has not yet responded for comment. According to Joshi Herrmann “banks are very, very cautious about their staff speaking to the media”. Earlier this year, he reported that a senior executive at Bank of America ordered an intern to take down a Facebook page in which they discussed long working hours, illustrating the secretiveness he believes is inherent to the city. “It’s difficult to report on, because they obviously won’t tell you what they’re doing, you just have to take them at their word, or you have to try to speak to people off the record and build a picture yourself,” he says.

For Jana, the answer is simple: “If I could now go to one of those universities, I would say ok, yeah the city is an option, but please, have a think about this,” she explains. “I would definitely love for current graduates to be thinking, there are so many other really exciting and much better opportunities for work right now,” she says.

“I hope people realize that you have a choice.”

Already the vacancies for the 2015 internships are listed on the Bank of America website. Thousands of students are expected to apply, though it remains unclear who will reach the square mile.

*James’ name has been changed to protect his identity.