The real reason Goldman Sachs needs its traders in the office
The headline figures are not representative of what's happening on the trading floor. Overall, only around 10-15% of Goldman's U.K. staff are back in its London office at Plumtree Court. On the trading floor, however, the proportion is closer to 25%. And despite exceptional second quarter results achieved when stafff were almost all trading from home, over time Goldman is keen to get its front office markets professionals back in.
We know this because Jim Esposito, global co-head of the securities division explained it in a 'markets update' posted to Goldman's YouTube channel last Friday.
"There are a couple of reasons why over time we are going to make a bigger pivot and have people come back to the office," said Esposito. "The first thing is that our intake out of universities is quite significant. It's incredibly important, it's really the lifeblood of our organisation - to take in really quality junior people and train them up. And so, when I think about running our trading businesses, we need to train the next generation of trader, salesperson, engineer and strategist and to do that I think we need to come to together in a very apprentice based model. That is harder to do virtually than it is physically, and now that we're getting into the time of year when people are coming into Goldman to start their careers, we're very focused on we're going to get them trained up and I think it is going to be important to get people back."
Esposito's second reason for getting his staff back into the office was collaboration and innovation. "I think we will be more innovative with our people working together and coming together physically. I think innovation has stalled a little bit, even though we have been operating efficiently working from home," he added.
Although Esposito stressed that the return will happen "over time", the implication seems to be that Goldman would like its salespeople and traders back in the office very soon - graduate trainees typically arrive late summer, so there's not much time to spare.
In the same interview, Esposito said that Goldman's Marquee platform, which he described as the "ecosystem" Goldman presents to its clients, covering everything from content, to risk analytics, execution services and ultimately click to trading, has thrived during the pandemic. He stressed Goldman's emphasis on its engineers and said that every day during March he'd wake up and say a prayer that the firm's risk management and operating systems would keep working efficiently for clients during the market chaos. Goldman's markets business has "operating leverage," said Esposito: this was how it was able to hit an 18.5% return on equity in the first half of the year, without adding extra staff or building new tech systems.
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