Why are banks raising salaries for young employees?

Over the summer, Morgan Stanley, Goldman Sachs, JPMorgan and Bank of America announced they would increase salaries for young bankers (analysts and associates under 30) by 20-25%.
According to The Wall Street Journal, Citigroup is also considering a similar move.

There are two simple reasons for this change.

First, competition in the industry is fierce in the pursuit of young talent. Second, a new concept on Wall Street is the “bank burn.”
Since the financial crisis, laws have been edited and it has affected the business of the big banks. Risky high-yield sources were eliminated from banking and compensation was reduced.
Without big payouts, Wall Street is not as attractive. The startup industry and tech giants like Google and Facebook, which can afford substantial salaries, are perfectly capable of competing with the financial world.
If a young talent starts his career at a major bank, after four years he will be ready for more intensive work at private equity firms or hedge funds, seeking higher bonuses.
Private equity firms, in turn, want to hire increasingly younger talent. Private firms account for 32% of compensation in the investment banking industry.
And they pay their young employees much more than banks do. What’s more, their bonuses are often given in the form of cash, while the banks’ bonuses are in the form of securities.
Now a few words on the second reason, the “bank burn.”
Wall Street is full of horror stories about the exhausting overtime work of young bankers.
Many such stories turn into anecdotes at the end, but some are more than serious.
Talk of a better work-life balance for young bankers began after the death of Bank of America intern Moritz Ehrhardt, 21, who died of an epilepsy attack in London. An investigation revealed that long hours of work and stress during them were the causes of the tragedy.
Such incidents make young talent wonder if Wall Street is really worth it. Logically, the big banks began to soften the terms.

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