‘Grueling’ hours at banks in focus after intern death
The widespread culture of long working hours and all-nighters for banking interns has been criticized after the death of a 21-year-old intern last week, with recruiters and human resources groups calling for changes to guidelines and working practices.
Moritz Erhardt, collapsed at his London home in Bethnal Green on Thursday, after reportedly working until 6 a.m. for three days in a row at Bank of America Merrill Lynch's (BofA) investment banking division. The cause of death is unknown and some newspapers reported that he suffered from epilepsy.
But in the wake of Erhardt's death, a group that advises graduates hit out at employers who allow young interns to work punishing hours. In addition, recruitment agencies that deal specifically with interns called for an independent body to support young people working in the finance industry.
"Internships should not be an initiation process of low pay, tortuous hours and tasks designed to push the young person to their limits, even of health. They should not be exploited because they're the intern," said Felix Mitchell, co-founder and director of Instant Impact, an intern recruitment agency in London.
London's Metropolitan Police confirmed they are not treating the death as suspicious, and said the post-mortem has yet to be completed.
The term "internship" currently has no legal status in the U.K when dealing with pay or working conditions, so firms are free to design their intern programs.
But CIPD, the U.K.'s largest human resources body, said its policy guidelines will likely be changed after this incident to include suggested working hours for interns.
"What it shows is that young people need a bit more support," Katerina Rudiger, head of skills and policy campaigns at CIPD, told CNBC. She added that young people were desperate to work hard, sometimes for free, in order to earn a job in this difficult economic climate.
John McIvor, BoAML's head of international communications, said Tuesday he could not confirm the circumstances surrounding Erhardt's death or his working hours. The bank said it was deeply shocked and saddened by the death.
"The whole point about internships is to give students a positive experience and to get to know our firm, and us to know them well, so we can work out who would be the best fit to join the company full-time after they graduate," McIvor said.
A former employee at BoAML, who asked to remain anonymous, said interns tended to compete with each other in order to prove themselves to bosses in the hope of gaining a permanent job when graduating. Long hours were common at most banks, he said, especially the larger U.S. banks.
Other former interns agreed, saying the culture of long-working hours was widespread. They were thankful this current case might put the work environment at banks in more focus.
A former intern at another investment bank said he had worked a hundred hours a week as an intern at the bank, and that first year graduate analysts worked the same hours, before cutting back to about 80-90 hours per week in their second year.
Another former intern at an investment bank dismissed Erhardt's story as "blown out of proportion."
"I mean three all-nighters is definitely awful, but I did that at university and everyone has done it at university," she said, adding that she worked around 70 hours per week as an intern, leaving work at 11 p.m. on average.
(Read more: Job seekers sleep on Manhattan street)
CNBC contacted several investment banks, but they all declined to comment on the subject of working hours for interns.
However, Richard Payne, a professor of finance at Cass Business School, said the lure of a prestigious and lucrative career and "glittering rewards" incentivizes interns to work long hours.
"Interns are in a culture where time spent at your desk is often, probably wrongly, equated with productivity and dedication," Payne said. "Combining these, leads to an intern wanting to stay that little bit later than his or her fellow interns, and this competition to stay late may be exploited by an employer."
Additional reporting by Bianca Schlotterbeck