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Intern's death puts spotlight on banks' working culture

By Oliver Joy, CNN
updated 5:40 AM EDT, Thu August 22, 2013
STORY HIGHLIGHTS
  • Banking intern Moritz Erhardt collapsed and died in his short-term residence in east London
  • The death of the German business student has called into question the grueling hours worked by interns
  • A chat room thread said he had worked three nights until 6 a.m.
  • His death comes youth unemployment, those aged 16 to 25, in 2012 reaches a record 23%.

(CNN) -- Banks are being scrutinized over the extreme working hours put in by interns following the sudden death of a 21-year-old undergraduate at the Bank of America Merrill Lynch.

Moritz Erhardt collapsed and died in rented accommodation in east London last week, the bank confirmed. According to city workers on the internet forum Wall Street Oasis, he had worked until 6 a.m. for three days in a row.

While no direct link has been made, the death of the German business student has put the spotlight on grueling hours suffered by interns looking to impress bosses and competing with each other.

Internships such as Erhardt's pay around £45,000 ($70,500) a year, pro rata, and jostling comes as youth unemployment in Europe soars to record levels, hitting 23% in 2012.

A BAML spokesman said the bank was "shocked and saddened" by the news. The spokesman declined to comment on unconfirmed reports Erhardt had epilepsy.

Cass Business School professor Andre Spicer told CNN interns are expected to work long hours to show their commitment to prospective employers, rather than being productive.

"The real reasons are cultural. All-nighters are seen as a rite of passage," Spicer said. "They show an intern is willing to push themselves beyond any reasonable limits at work ... if large firms hope to be sustainable and attractive to employees, they need to tackle the extreme hours culture," he said.

According to the bank, all BAML interns are assigned a "buddy," and some get a staffing officer whose job it is to allocate work across the group to make sure it's manageable.

Katerina Rudiger, head of skills and policy campaign at the Chartered Institute of Personnel and Development, told CNN employers try to make internships a positive experience for young people. Balance must be kept, she said, to ensure interns were not overburdened.

She said: "Young people really struggle with market access and they can be quite desperate... to get their foot on the job ladder and are willing to do whatever it takes. In some cases that can be too much."

Rudiger added: "Another issue is that a lot of young people have not experienced a work place before so they don't know the rules and what is expected of them. They don't challenge their employers."

Erhardt was in the sixth week of a seven week internship when he died. Bank of America's interns have since been told they can leave the program early without negatively affecting chances of future employment.

Dillon Khan, author of the The Intern, told CNN increased media scrutiny on internships, particularly in the UK, is forcing companies to be more careful when employing young people.

He said: "It's the type of news story that will catch fire very quickly, if a reputable organization is not doing its duty with interns. Organizations are very conscious of these things because they don't want a bad reputation."

Erhardt -- who had completed internships with a number of other banks -- was staying in a ground-floor flat at Claredale House, a four-storey building known as "Banker's block" due to its reputation for housing interns in the summer months.

The BAML spokesman said of Erhardt: "He was popular amongst his peers and was a highly-diligent intern at our company with a promising future. Our first thoughts are with his family and we send our condolences to them at this difficult time."

Additional reporting by Mark Thompson, CNNMoney

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