Bay Street should bring the fun back – just a little bit

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Everyone responsible for hiring at investment banks should clear their calendars – there's a mission they can't afford to put off any longer. Starting now, the race is on to figure out where Bay Street's fun went.

Ever since the global financial crisis put capital markets in the bad books, Bay Street's way of life has changed dramatically. The shift is often imperceptible to outsiders, because total compensation is still incredibly lucrative for employees at the biggest dealers. Annual paycheques under $500,000 are sometimes still pooh-poohed. But behind the scenes, there's been a cultural evolution that gets little attention, and it has significant implications.

Gone are the days when it was routine to roll out beer fridges or beer carts on Friday afternoons. Same goes for Thursday nights out for the juniors, sponsored by a managing director who happily put down his or her credit card.

Missing out on these things is the very definition of first-world problems. Yet Bay Street and Wall Street don't operate in vacuums any more. It used to be they had little competition for the smartest graduates from the top schools, and that they paid too well for rival companies to even contend. There's been a dramatic shift in the past decade. In the current war for talent, they are now losing to Silicon Valley and startups. And badly so.

What social-media and tech companies offer their employees is off the charts. In 2014, Facebook hired Nathaniel Eckhaus, of Blue Smoke and Eleven Madison Park fame, as its chef for the company's New York City office, to conjure up breakfast, lunch and dinner ideas five days a week. Don't want a full meal? Don't worry. The salad bar is always stacked with locally sourced produce.

At Google, employees with kids get paid a special bonus, known as "baby bonding bucks," to help cover the costs of diapers and formula during maternity or paternity leave.

Even small startups that barely make a profit will offer weekly sessions where baristas visit to make whatever hot drinks employees want. At Zenefits, which was until recently one of the hottest companies "disrupting" the world of human-resources benefits, employees gathered for 300 shots of whisky to celebrate signing the biggest account in the company's history.

All of this has a huge effect on morale. You could even argue it helps foster team building, which is the case Facebook makes. Its NYC lunch area is designed like a high-school cafeteria, so that teams will eat lunch together on the company's dime and possibly talk about new ideas.

For some reason, this is deemed acceptable for these companies, but would surely be ridiculed if Bay Street dealers did it. "There go those bankers again," some would say. Yet many of their old perks helped foster the same team atmosphere. Junior staffers working 100-hour weeks need to blow off steam once in a while, so group heads would pay for some bottles and look the other way if some employees didn't show up until 11 a.m. the next day, crushing a purple Freezie.

Some critics argue that such perks aren't as necessary any more because the investment banks are rethinking the hours they demand. Indeed, there has been some movement on this front – in the United States, leading investment banks have instituted rules such as giving juniors a whole weekend off once a month. BMO Nesbitt Burns announced plans to institute something similar here. These are improvements, but the hours are often still ridiculous. One weekend of freedom a month isn't much.

What started as reining in the most ridiculous perks, such as scaling back closing dinners that cost tens of thousands of dollars, has morphed into an endless cost-cutting campaign. Every year, it's seems like something new is on the table – rewriting the rules for when someone can upgrade to a first-class flight, or asking employees to pay a portion of their cellphone bill.

Somewhere along the way, we lost sight of what's reasonable and what can help hire top recruits. Business school grads used to be pampered by investment banks with recruiting dinners during final-round interviews at some of the hottest restaurants. During recruiting last fall, potential hires were sometimes lucky to get a rubber-chicken lunch at the investment bank's office.

The extent to which perks were provided before the financial crisis was much too loose. Too often, common sense was lacking. You could argue 21-year-old kids in fourth year of undergrad should simply be happy to get a job – they don't need to be wined and dined.

Yet we've swung too far the other way, and I worry it's largely a knee-jerk reaction to the financial crisis. If investment banks offered the same perks as Facebook or anyone else in Silicon Valley, they'd probably be vilified. There's got to be a happy medium somewhere. Because if it can't be found, recruiting and retaining the best young employees is going to be tough.