Early careers for analysts in fields such as finance, consulting, and investment banking are renowned for their long hours, with analysts sometimes working 60 to 100 hours per week. These positions are also known to pay high salaries and offer promising career growth opportunities, but is the trade-off between a poor work-life balance and good pay really worth it?
Professor Ole-Kristian Hope, Deloitte Professor of Accounting at the Rotman School, is one of the authors of the Happy Analysts study, which analyzes the optimal work-life balance for entry-level financial analysts. The new study is one of the first papers to analyze the impact of work-life balance on employee performance.
In an email to University, Hope explained that several factors led him to pursue this study, such as his previous research on analysts and his desire to study work-life balance more broadly. âNo previous research has had access to data as detailed as what we have in our (Glassdoor) study. Most of the previous research has focused on a particular company (a ‘case study’) as we provide large-scale empirical evidence, âhe wrote. The authors of this study used 6,192 samples from Glassdoor to perform their analysis.
The study was co-authored with Congcong Li from Duquesne University, An-Ping Lin from Singapore University of Management, and MaryJane Rabier from Washington University in St. Louis. It was published in a recent issue of Accounting, Organizations and Society.
A nonlinear relationship
After examining a large sample of employee reviews on Glassdoor, a website where employees anonymously rate companies they work for or have worked for in the past, Hope and her colleagues discovered a non-linear relationship between l work-life balance and analyst performance. and career advancement.
When the perceived level of work-life balance is low, which means analysts believe they spend the majority of their time working, increasing work-life balance yields positive results in terms of better analyst performance and career advancement. On the other hand, when the analysts’ perceived level of work-life balance is high, which means that an analyst perceives that they have sufficient time outside of work, the reduction in working hours gives negative results and is generally associated with poorer performance and career development for analysts. This is because employees need a certain level of psychological stimulation to function effectively.
The study aimed to determine the optimal level of work-life balance that made analysts the most productive and efficient by taking the predictions that an analyst had made about a company’s future profits while assessing their level of performance. work-life balance on a scale of one to five. . The study found that, on average, the accuracy of analysts’ forecasts – the accuracy of their forecast of a company’s future profits – peaks when their work-life balance is rated at 3.47 out of five.
Find that balance
Hope found that the practice of supporting employees in terms of work-life balance varies considerably from industry to industry and country to country.
He noted that North America is not as good in terms of work-life balance for employees compared to other countries, such as Europe. North American companies offer fewer vacations and limited time off while the emphasis on work-life balance is greater in Europe.
“I believe that the improvement [work-life balance] can be a competitive advantage for companies to attract and retain high quality employees, âHope wrote.
Katherine Ye, a fourth-year economics student, is currently a finance intern at Thomson Reuters. The company offers days of mental health, autonomy on projects and networking opportunities. Ye values ââher experience and feels lucky to have a good work-life balance. However, working from home can blur the lines between when she is working and when she is not.
âI have noticed that a lot of my colleagues don’t go offline for lunch and stay at their desks to eat. Seeing the yellow ‘absent’ symbol next to my icon on Microsoft Teams makes me nervous because, as an intern, I want to show that I am as present as possible, âshe wrote in an email to The university.
Hope believes that a certain work-life balance is good for all employees and can take many forms in their lives, such as staying active, pursuing hobbies, and spending time with friends and family.
Hope offered similar advice to undergraduates. “You have to study hard, but also strive to be well-rounded individuals – this will improve overall health and well-being and will likely lead to greater academic and professional success as well.”