Edit / Clarification: Grades are NOT the only metric. But they MATTER.
I've been noticing a lot of posts recently with people asking about their chances at recruiting if they have weak grades. I often hear the message that grades are not everything, that soft skills are important too. While it's true that I don't want to work with a robot (airplane test etc.), the thing I care most about is my potential colleague's ability to do the job. If I could only pick a single factor to evaluate a potential junior banker on (in terms of a "paper" application - no interview), I would choose grades.
I've heard some people say that grades aren't always well correlated with performance. I agree. But I would counter that if you could pick one other metric that you think is better what would it be?
A more traditional school of thought would suggest that grades are a proxy for work ethic, ability to learn and base level knowledge / intelligence which are important factors of success in a junior banker's career.
Unlike stocks, for people past behaviour is often a good proxy for future behaviour. I'm very hesitant to provide a recommendation for someone who has weak grades.
Most banks have a cut-off that isn't insurmountable. I'm not too far from it. I highly respect people with grades well in excess of the cut-off because you can often tell that they earned it (something I have not done, could not have done and therefore value greatly). I have usually found that I enjoy working with these ambitious individuals.
Would love to hear any other opinions.
Eh, in my experience grades are basically used as a proxy when no better one exists. I had a kid apply that had like a 2.5 GPA but raised his younger brother after their dad died. I wasn't about to question his 'work ethic'. Similarly I have had people with 3.9 GPAs be total dogshit entitled dickholes.
Your GPA tells your story unless you have a better one that goes beyond it (like internships, outside activites, etc). Thats basically what it comes down to.
Agree that grades matter in recruitment, but if I had 1 factor alone to base hiring off of (and we're talking about college grad recruitment) it would be internships--quality internships. Quality internships show that the individual had either the grades, soft skills or both to obtain a sought after internship. This allows for other people (other organizations) to do the heavy lifting for me.
What about the kids who's only in the BB because dad's a MD in the group though (or whatever connection, etc)? I agree with you but sometimes that can be deceiving.
Every metric taken by itself could be deceiving. All I'm saying is that in a pile of 1,000 resumes I'd consider it the single best metric for future ability.
you are way overestimating the intellectual capability of a banker. you are a SALESMAN at the end of the day. your client doesn't give a flying fuck about grades.
Intelligence is only one of three categories / qualities I said grades COULD be a proxy for (it was also the last with work ethic being the first). Yes, IBD is sales, but not at a junior / entry level where people care about grades. No junior banker is "selling" anything (no revenue responsibility). I'd argue the ability to sell is what distinguishes a great candidate from a good candidate. But ability to do the job is table stakes.
Also mrharveyspecter point well taken on grade inflation, but if a candidate don't have good grades despite that, what does that say about the candidate? Our grades are very close together, so any criticism you read in to my comments apply equally to myself. But I think it's very defeatist to dismiss grades right out of the gate.
On the other hand, my school is known for grade deflation, so that has definitely helped.
Grades matter for IB recruiting because of the massive amounts of applicants that banks get. When you are recruiting for four analyst positions and receive 1,000 resumes, most of which are very similar, banks need any easy way to whittle down that stack. An arbitrary GPA cutoff is the easiest way since 99% of applicants have their GPA listed in the top three to five lines of their resume.
Grades don't prove anything especially with the rampant grade inflation that occurs at many of today's top schools. If anything all they're really good for is as a screening method for jobs that gets thousands of applicants.
If you're primary basing your hiring on the first couple lines of a persons resume(which would be the Education/grades section) you're doing yourself a great disservice.
But then again what do I know, I only had a 3.4 so you probably wouldn't have even considered me right?
Since we're all throwing our $0.02 in - during my last interview process there were three people that I absolutely had to get approval from. One grilled me on technical questions and asked what my SAT score was... and the other two people (much more senior) talked about playing sports/college basketball.
I think it just varies by individual, as it does here. Good grades absolutely help you (think about grad school also) but that's a not a reason to give up. Grind on internships, networking, and soft skills. I would never hire someone I didn't enjoy spending time with.
Or make life easier for yourself and do all of the above.
I would much rather take a candidate with a 3.4 GPA but with a successful (50k+ revenue a year) business vs. a 3.9 GPA candidate who stocked up on bullshit leadership positions.
OP,
Literally statistics prove that grades are not the best proxy to determine whether someone will be successful in a role.
http://www.scoopwhoop.com/news/eny-remove-degree-criteria/
As someone who has put my career back at least 4 years due to fact I didn't care about it and spent the entire time working in restaurants after dropping out. I would say grades aren't that important to me when I am interviewing.
Things I want to know from an interview:
How you think? By this I mean a mixture of intelligence/problem solving beyond the obvious stuff you could read in some book or google in 5 seconds. Not that reading books isn't useful but I want to know you can actually use your understanding of these concepts to generate an original idea.
Communication skills. I don't have all day to try and understand what you are saying. I only have so much brain power and time available per day and wasting it trying to interpret what you are saying is not how I want to spend it.
Personality. I have enough prima donna nerds I have to interact with on a daily basics unless you are a prime candidate in the top two I don't really want to deal with your awkwardness.
I also try to evaluate if they want to be a gunner in tech or just get a paycheck for being a code monkey.
Tech is different though especially when you consider the recruiters are at least a decent filter and the job to applicant ratio isn't as favorable (to the employer).
Also in the case of my fiance it seemed like it was all about networking to get a job at the top hospitals. I have heard the ratios of applicants to job openings is insane and you have to know someone to even get your resume looked at.
Regardless if I could do it all over again I would have been a finance/math major and made sure I was bringing in a 3.5 no matter what. Hindsight is 20/20 though.
Reading books - depends what you mean. If you memorized some textbooks, yeah that's not that great. But if you're well read, and can connect theories well because you know about a lot of them, that is great.
Grades matter in most careers not just banking.. While they matter less once your get some work exp - out the gate they are HUGE. I cant say that enough and while unfair in some cases - grades are a safe bet on judging someone from a huge stack of resumes. I am a little older and when we did a resume drop plus online resumes we had over 8000 resumes for 3 jobs... do the math and something is needed to cut that number down.
Demonstrably false.
Completely true.
Its not that they're actually good at measuring or predicting anything, its that there isn't another way when you have to deal with insane volume. I have never had to cut from thousands to dozens as I've always been far enough along in the process that I had 50 or so handed to me so obviously my outlook is different but this makes sense.
Totally agree and think that if someone already has FT experience it probably doesn't matter too much. Also, some majors are more difficult than others. I'd rather have a 3.2 in computer science than a 3.9 in communications.
UTDFinanceGuy Yes, grades are not the best proxy (which is what I said earlier), but what is "online assessment"? Smells like a standardized test which is basically saying E&Y did their own "grading". So what would you use instead?
@Aphex2123" I agree 100%. But I specifically said excluding interviews. Some people won't even get to the interview stage because they get dinged for things like grades. For a paper interview, what metric would you use? If you have thousands of initial candidates, you can't interview them all to get to know them better.
Yeah, I kinda went off on a tangent.
I agree grades are a big one. But I am more likely to use school and major. I don't think finance jobs have as much diversity in majors (just assuming).
I would go with internships and other competitive en devours particularly team sports. It shows you can work as a team player. Lots of stuff in college is done independently or with one other person who is probably your best friend not your future boss.
Another weird one would be what side project have they worked on. If I was an undergrad in finance I would probably start a fintech project even if you don't plan on becoming something of value you learn a lot and it shows on your resume. Also starting a business or something along those lines even if it is small.
TL:DR School/Major, extracurricular activities where you have achieved something and side projects/business.
Tbh grades are a good indicator of what you need from an analyst - someone who can work till 3-4am and show up next day and not get tired (which is what you get from a good school, tough major, high GPA person). The social guy who might be fun to get a beer with generally disappears early, gets drunk at a weekday night and doesn't show up next day till noon and can't even find him to open the conference line, even from his bed. Happens more often than you'd think and his social skills are pretty useless cause his only client interaction is carrying roadshow decks. BUT best analysts are ones who will just work hard, do whatever is asked with grounded expectation of the job, and lack a privileged mindset (e.g. I'm to good to do this). They can be from a "lower" school, but they're not a 2.5 who was messing around for last 4 years either. In any case, tough for 22-23 year olds to deal with the demands of the job with little recognition.
Also analysts can be dumb. You need some intelligence, and we have few dumb ones in my group somehow. Also even though internships are important, they follow the same rules anyway (can't easily get a good internship with low grades).
if this is really the expectation, then it's a no brainer why analysts jump ship. i'm glad my former group did not operate with this mindset.
opening a conference line... can't you do that yourself? I actually agree with you that the most reliable analysts are obedient, do whatever you ask, no questions, etc... but is this really good for the industry? Is this how you want to be grooming the next "generation"?
while resource allocation is an important aspect of management, if you judge a person's performance based on trivial points such as this, you are destined to fail as a manager. I am curious... are you post MBA associate or a-a promote? If you are post-MBA, shame on you and the school or whoever instilled this type of thinking onto you. If you are a-a promote, this is your opportunity to make a difference in the banking culture.
the deck carrying comment, i find this funny. if the analyst didn't go, YOU would be the deck carrier.
the BEST analysts filter out the bull shit but gets the necessary and important work done when its needed.
Before everyone else get one serious rage on why no one else opened the line, it's because he had the code for his own line and didn't have it posted on his cube or share beforehand. And the was inaccessible by cell phone. Again very trivial, but it was a lunch time call and we had to resend dial ins and all that. And no didn't blow up on him or throw him under the bus for it, although it happens more than once. We just sent a new dial in and got people moved.
Carrying books, yes that's what analysts or associates do. They are not their winning business for the firm. That's just how it is. As long as you don't do something totally stupid in front of people, you are doing great.
Again, at lower level the job is nothing ridiculous. Just do what you are asked and don't drop balls frequently or stupidly.
Not exactly. If you don't have stellar grades but have internships from freshman/sophomore year onwards, that can be enough cushion (getting internships when grades were still higher / expectations lower) to give you a semblance of experience and a decent network.
I think theoretically GPA should be a great indicator of competence and intelligence. It shows you can obviously do a lot of the mindless/annoying crap in addition to the serious thinking needed to get an A, but also a bit of 'high level shmoozing' since getting a good grade also involves having, to some extent, a working relationship with your professor. (The latter factor matters more in humanities subjects.)
Despite this, I've met way too many idiots at my target school with high GPAs. Yes, I overvalue myself and have an ego like anyone else, but I'm often surprised to hear of dumbasses boasting 3.7-3.9 GPAs. I've taken classes that have seriously changed my thinking and have grappled with the material taught well, yet it's always the quiet in the front who don't take much out of the class who do best on the exams, etc. I guess that's a indicator for an analyst or something but definitely can't see a correlation between GPAs and long run career success.
What kind of cut off are we talking about? And how does this change with your major? You can't really compare a 3.9 in a bulllshit major like English to electrical engineering or something.
I agree with the OP. Grades show explain more on effort than raw intelligence. It is a good metric for a new hire out of school with limited experience. Howver, I believe it to be worthless for an experienced hire.
"Carrying books, yes that's what analysts or associates do. They are not their winning business for the firm. That's just how it is. As long as you don't do something totally stupid in front of people, you are doing great."
That is the problem... The most rewarding aspect of a client facing role is to actually face clients. One of the best banking teams I've worked with had the entire lineup, from analysts to MD and everyone had a speaking role. This was a key differentiation that won them the deal. Guess who carried the books? The MD.
Most investment banks are run like the former USSR.
On a roadshow client is mostly taking to investors, analyst or MD aren't. Fidelity won't even let bankers in the room.
Client meeting, depending on the client and what's going on, the larger team can have 15-20 ppl (coverage group or two, product groups like M&A, lev fin, sponsors, ECM, corporate banking or whatever else). How many people are going to show up and talk. For out of town one, analyst or associate spending a full day traveling isn't even productive when other things are going on. Analysts or new associates can rarely contribute in a drafting session for an IPO when MD from another bank will just control the conversation. It sounds easy, but some one straight out of college or MBA can't just show up and start drafting a s1 or discuss merits of some major industry moves. They just don't know it. And most entry level aren't inclined enough to invest time in it themselves (95% of analysts want to leave banking ASAP regardless and that's true with half the associates).
You are just justifying the current banking culture. I am confident if analysts had a good experience they would be more inclined to stay. Look at shops like Union Sq. Advisors and Centerview. Most of their analysts stay to become Associates.
You don't need to review what goes on at meetings, I know, and I been there. It fucking sucks but the new generation of bankers CAN do something about this rather than accepting the status quo.
Unfortunately new generation of kids we have always turn down attending client meetings (with excuses such as I'd rather finish early and go home, or just ehh) and little interest in staying late. All the MDs and Directors we have are up at 5am catching a flight and reviewing stuff till late at night. Most analysts have a simple goal of coast through the two years if possible and find the next job asap. WSO is a good place to see how more kids are interested in exit more than anything else. Probably goes back to hiring privileged kids who think they are above doing menial task, but someone has to do them.
Grades are a great metric to screen resumes as long as you adjust for difficulty of major, difficulty of school, quality of peers, grading curves, etc. Otherwise they're about as useful as shoe size. Though since the banking industry is built on a foundation of false precision I would say grades are an excellent barometer
Grades matter but they are not the end all be all. 20 first rounds, 7-8 superdays (I forget, been too long). 2.8 GPA.
Howd you do it? I will sent you a PM now.
How well you did with a mediocre GPA isn't the point. We all know with some dumb luck and a right set of cold emails and phone calls, some kid from Southeast Florida College with a 2.1 can get a BB IBD offer. The question is if someone with that profile has the same potential to succeed in the industry as some Summa Cum Laude from an Ivy.
In my experience my grades weren't outstanding, but I go to a good school, have a lot of work experience, am very involved in a big organization at my school (NOT a frat!), and I'm very good in interviews. I've gotten most of the interviews I could have reasonably wanted.
For me, I had anxiety attacks that screwed up my grades for a year, so I'm just happy it isn't worse. Also, while working, every single one of my former internship bosses (3 internships) would hire me back.
I don't think grades matter coming from a non-target. No one ever seemed interested in mine. I think it came up literally once. Quality of undergrad seems to be way more relevant.
I echo Virginia Tech 4 Ever's sentiment. Past quality internship experience show intelligence and soft skills at the same time especially if they can talk about it well in interviews.
It also serves as a good screening tool as prior employers have already been impressed with the candidate enough to take him / her on as an intern
lol @ some of the misleading posts.
However you spin it, your grades will be one of the most important, if not the most important determining factors on whether you get an interview or not.
You know what the best part of this silly discussion is? I don't have to pick a single factor to evaluate job candidates with. I get to use all of them.
Do grades matter? Yes, nobody wants to hire a lazy shit who can't even make the time to study for the major that he or she chose to pursue. Unless the student was too busy running a business to put the hours in for their coursework. Or maybe they bullshitted and cheated their way through undergrad. So GPA in a black box isn't reliable.
Does previous work experience matter? Of course, it means they've proven themselves in a professional context. Unless it was a nepotism hire. So work experience in a black box isn't reliable.
Does sociability matter? Definitely, you don't want to work with someone for 80 hours a week who will annoy you, or worse yet, hurt the firm's reputation with a client. But what if the candidate was simply nervous during their interview? So maybe soft skill impressions aren't reliable.
The point is that you can't really sit around and pontificate on which factors are the best to use because it's so context-dependent. But if you honestly have to ask this question, then yes, study hard and learn the material. You'll keep a high GPA and you'll be better prepared for your interviews.
I think the context of the discussion is with regard to a hiring manager receiving hundreds of resumes and trying to cull them in a short period of time.
Frankly, I'm a little surprised at the amount of negative responses and at the lack of value that people ascribe to grades.
Better Grades are Better First of all, ceteris paribus, better grades are better. I'm not comparing a 2.9 in a STEM field versus a 3.8 in a softer discipline or a 3.2 for someone with some other impressive qualities (Olympic athlete, military service, etc.) versus a 3.9 bookworm. Also, yes there is grade inflation, but better grades are better.
No Other Metric Is Measured Over Years Candidates always want to prove how hard working they can be and often ask how. Internships are great, but often to get the first one with no work experience the best way to prove you are hardworking at an entry level is usually grades. Grades are the only metric that measure you over a period of years, not months.
Good Grades are Not Enough If you have really good grades, it doesn't guarantee that you are going to be good at the job.
But if you have really weak grades, it's a struggle for people to get comfortable with the fact that you will be good at the job (even if it's just perception).
There are any number of legitimate reasons why you might have weak grades. But the lower you get, the harder it is to explain.
Bad Grades Aren't The End of the World Yes, it is possible to get in with less than stellar grades. But those of us that have should consider ourselves lucky and be grateful.
Good Grades are a Foundation to Build On. Not the End Game The whole point of getting good grades, studying and learning is to position yourself well and set yourself up for success. It's a lower risk environment to try to learn the base concepts (like CAPM) rather than in a high pressure, time sensitive environment of the job.
you made the point "ceteris paribus"
why even bring this point into discussion when in reality nothing is ever "ceteris paribus"??
This is probably the best advice out there for kids who may be struggling with bad grades or only good grades and no extracurriculars. Everything is related, don't be lazy, keep trying.
What's up Tdot??
I came from a non-target and got GRILLED about my grades at every point. I'm certain the only reason my resume wasn't axed from the pile earlier was the fact that I had two very solid internships before beginning fall recruiting. With that in mind, yes your grades do matter, but the subsequent question after "does this person have work ethic/talent/intelligence etc." is "what have they done with those qualities" Substance matters.
well fuck...
I think internships are at par with grades in importance and should be used in tandem in reviewing resumes.
But if I have to pick a single metric (during preliminary/early stage of recruitment), despite only achieving a mediocre GPA during college, I'd choose grades. Then, I would see if the candidates could live up to his/her grades on the interview. I believe it's still the most efficient way.
In sum: Good GPA to enter the room as a candidate, great interview to exit the room with a signed contract.
Grades are only important when no other gauge exists. There's usually more to the story than how good of a student they were. I've had some Ivy league 4.0 interns and analysts that were pure shit. At the end of the day, all I want is someone with drive, intelligence, and ambition. If I can identify these factors in an applicant, their hired - I would care less about the no-name school they went to and straight C grades.
Too many people cheat their way through school these days. It's fucking ridiculous how bad the cheating is in some schools... you literally have stupid fucks with 3.9's. I know a few years ago Harvard kicked out over 100 kids in one year for cheating. And those are just the ones who got caught.
Agree. That stupid GPA inflation makes hard-workers less appealing, might not be enough for 1st round interviews. I know of an asst. professor who lets 1/2 of my class cheat because he wants happy evaulations. That is a disgrace.
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