Work/life balance in the finance sector continues to represent a core issue for employees. As uncovered by our annual Finance Trends Report, 91% of employees in finance work before and/or after their contracted hours. When asked why, 51% said they have more calm periods at these times, and 40% are more cognitively engaged during these moments. 38% said they had too much work for their assigned hours, highlighting the need for greater efficiency within their team.
Following the pandemic, hybrid working has become a prevalent working style. It has also generated new challenges for employees, particularly those finding it difficult to separate work time from personal time. Finance managers are now responsible for implementing safeguards to prevent these blurred lines, as well as maximising their team’s productivity and wellbeing.
Does the finance sector really work longer hours?
Personal and professional can end up being two sides of the same coin. Growing job demands, globalisation, and industrialisation have made this a concern for employees of all levels of seniority (and across all sizes of organisation).
The banking industry, for example, is at the forefront of the challenge posed by work/life imbalance. Work quotas are tightening, and individual responsibilities now include the delivery of more ambitious goals and higher-quality outputs.
Working during the weekend has become standard practice for many investment bankers. It is not necessarily because banks compel them to work on weekends, but rather the sheer volume of work and pressure placed on investment bankers by one another. And their work environments were already perceived as intense.
How many hours do you work in finance?
So, what are the standard working hours in finance? According to research by Morgan McKinley looking at working hours across various sectors, 93% of respondents in the Banking industry indicated that they either always, frequently, or occasionally work over their contracted hours. A 2021 Goldman Sachs study looking into working conditions suggested that junior staff at investment banks may work as many as 100 hours per week.
Why do accounting and finance employees work more hours?
While many factors contribute to this tendency, a few additional elements have made the work hours even more bloated:
One of the causes is the increased prevalence of non-stop remote pitching. When Managing Directors are no longer required to physically present pitches, they can conduct at least 10 remote pitches every day. Analysts and associates are therefore required to provide a bigger quantity of presentations and meeting materials, even if potential clients don’t end up studying them thoroughly.
Coordination of presentations
Additionally, coordinating presentations remotely can be a challenge because there are many people that usually work on any given project. Problems that might have been resolved in fifteen minutes during a face-to-face meeting may go on for hours if everyone doesn’t have the appropriate communication tools. Video calls are extremely useful, but the technology behind this is still in its infancy.
Proliferation of SPAC transactions
The rapid increase in Special Purpose Acquisition Company (SPAC) transactions, which require extensive copying and pasting of templates, has also increased the strain on financial experts. Even though these duties can be onerous, the financial industry continues to witness a significant volume of genuine M&A and capital markets transactions, partly due to the actions of central banks and the availability of cheap money.
The highly competitive finance sector has a reputation for being a cut-throat industry. This is both in terms of rival companies and fellow employees with similar career aspirations. This means many will work longer hours to get ahead of competitors and to earn the recognition that will allow them to stand out.
High-stakes investment management
Those in finance teams can be accountable for managing large investments for the company, as well as handling large quantities of customer money too. These obligations make their role extremely sensitive and important. Any errors might result in substantial financial damages.
To handle these responsibilities efficiently, they must have significant expertise and attention-to-detail. And therefore, they may work long hours in order to guarantee the outcomes others are looking for.
Developing presentations and research reports
Finance professionals must devote a lot of time to conducting financial research/analytics and creating reports/presentations for both internal and external purposes. This involves compiling and analysing complex financial data, and then presenting it to the relevant people in a digestible manner.
This could involve reports that form part of a client pitch or investment proposal. The sheer amount of data involved, and the need for this to be extremely accurate, means a large time investment is required.
Communication with clients
Finance sector employees may have multiple customer engagements, including meetings, phone conversations, emails, and other correspondence. They will have to speak to a variety of important stakeholders (both inside and outside the business) due to the crucial information they possess.
For this reason, many stakeholders will expect these employees to be contactable at all times. This may result in finance professionals working during evenings or even when they’re supposed to be on annual leave. Some stakeholders will be located in different time zones too, which will further contribute to working around the clock to meet their demands.
How does this affect finance employees?
Long hours within the finance industry can have a detrimental effect on employees, in the following ways:
Physical health implications
Working late on a regular basis can lead to chronic health problems such as high blood pressure, heart disease, and diabetes. Studies have also shown that working long hours can increase the risk of stroke, obesity, gastrointestinal issues, and heart problems (as seen in research into long work hours in the office conducted by the American Heart Association).
Mental health issues
In addition to physical health concerns, extended work hours may also impact mental health. In a study looking at the negative impact of long hours on Korean workers, researchers discovered that the longer the working hours, the greater the degree of stress and occurrences of depression.
Extended work hours may also result in sleep deprivation and chronic exhaustion, which can result in irritability, mood swings, and impaired attention. In this vein, one study looking at the wellbeing of couriers in China found that, as a consequence of occupational stress, working hours had a substantial indirect influence on mental health.
Lack of social life
Owing to the long hours required in the financial realm, employees may have limited time for social activities and maintaining connections with family and friends. This could result in feelings of isolation, loneliness, and burnout, all of which can negatively affect them.
Since working in finance may be stressful, social support from friends and family can be essential for controlling stress levels. When financial professionals are unable to participate in social activities, feelings of tension and anxiety might escalate. In turn, this may influence their job performance, cognitive capacities, and decision-making capabilities.
Burnout and stress
Working long hours are considered normal because of the significance and prestige of the business, but this often results in severe employee burnout in finance. End-of-month reporting periods add to this stress, leaving little room for recovery. The present economic crisis has increased the burden on finance departments even further, as they are expected to find solutions and achieve highly scrutinised goals.
Due to the industry's delayed adoption of automation, many finance professionals still need to do a large portion of their job manually, which increases the likelihood they’ll feel overworked or exhausted before their shift is over.
How does this affect the CFO and the finance function?
Long hours of work for finance professionals may have serious consequences for the finance department, as well as the CFO's capacity to advance strategic goals. The CFO is now expected to lead a data-driven strategy and secure the business’s long-term viability, but they may struggle to do this if their employees are experiencing burnout due to an unmanageable workload.
These CFOs may miss out on opportunities to drive expansion and boost profitability as a result. On top of this, the results they are delivering for stakeholders (and the output of productivity) will decline if their workforce is exhausted. These workers may miss deadlines and make mistakes due to the stress levels they’re facing (which could be costly if they’re generating reports for clients).
On top of this, it may be difficult to maintain a settled and experienced team, as the high demands faced by these finance professionals will likely lead to a high employee turnover.
Is work/life balance possible in finance?
There is still a long way to go to address the problem of long hours in finance. However, technology has a significant role to play in assisting workers to strike a better work/life balance. Leaders also have an important role in this pursuit, by embracing innovations and championing a culture that helps to shift expectations.
As Emily Brady emphasised in our Finance Trends Roundtable: “I am seeing colleagues work really long hours, including evenings and weekends. These aren’t behaviours that, as a leader, I endorse or encourage. That makes me really mindful of the behaviours I display. Within my team, this behaviour is definitely driven by a desire to deliver an excellent service to our stakeholders and provide high-quality data in a timely manner.”
With this in mind, financial management software such as Advanced Financials helps to make this possible, as it ensures more can be achieved on any given day, while lowering the time/energy investment required by those using it. It is a transformative Cloud-based solution that centralises financial data, automates mundane procedures, and gives real time insights into company performance.