Banks should take this as a lesson to stop recruiting so early
The race to the bottom in IB recruiting timelines over the past couple years seemed like it was never going to end. Now, it appears that kids who were recruited for junior internships halfway through their sophomore year - without having taken anything beyond intro-level classes and likely not having any meaningful internships or experience under their belt - are going to be entering those very same roles full-time without having experienced them through an internship.
The 2021 incoming analyst class at every bank is going to be an absolute disaster. Though I wish the best for everyone entering these roles, I'm hoping banks take this as a lesson to recruit more intelligently and stop valuing speed over quality. Kids who would have failed miserably in their internships are now going to be joining full-time. Kids who would have realized one week into a banking internship that they hated it are now going to be joining full-time. The 2021 incoming analyst classes are going to be filled with some of the most incompetent, unmotivated bankers who ended up there just because they managed to get through a super day in their sophomore year. Hopefully, banks learn from this shitshow and push back recruiting to a more reasonable time where they can recruit people who are actually qualified and motivated, instead of people who just applied on a whim.
Chill. It's a pandemic, this isn't some common occurence. The benefits of attracting top talent are substantially more valuable than the outcome if every bank acted like there'd be a pandemic each year.
I think the point you made about interns who will realize they hate banking is spot on and that can likely result in higher attrition than usual. However, I do have to disagree regarding the classes being filled with incompetent bankers. I think most of these banks have done the math and realize most of these people will get return offers anyway, and that they can cut the ones who end up being poor performers. Yes, this class will be less experienced than previous classes, but I think its too early to say there will be a notable difference when its all said and done.
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Agree with you it's a problem that analysts will potentially find IB is not for them and leave.
But in terms of costs to the bank, if anything this will save them money. They didn't have to convert the offers, think of it as an option they had, given they decided to exercise that option we can deduce they calculated the benefits of securing inexperienced FT candidates for next year to be greater than the risk they don't perform and greater than the cost of not having an analyst class ready should deal flow increase by next year. Ultimately they can still let go of those that don't perform well and keep those that do. It's a win for them because all they're doing is increasing their optionally in an uncertain environment at a relatively low cost.
unless you're on the non target grind and have many valuable experiences. Theres kids in my SA class who have never had an internship.
That is actually scary to think about...
This is assuming that the kids would go through their summers and incompetent ones would not get FT offers, hardly the truth.
later recruiting wouldn't have solved the problem, whats the difference between a second semester sophomore and a first semester junior other than a few months?
TBH I am quite confused on what are BB's and EB recruiting strategies. We are right now on the brink of a huge recession (could be the worst ever registered since WWII), there is so much uncertainty that markets are very volatile and the deal flow has stopped. Banks have already cancelled dividend payments, and it is likely no one will pay bonuses this year.
Given these circumstances, banks should present lower return offers rate than ever, maybe even lower than 50%, but instead they are keeping all their interns without even testing them. In my opinion, it would be smarter to hire fewer summer interns, and if eventually there is a shortage of staff, you can always fill your needs through FT recruiting or Off-Cycle internships. There is always a bunch of people with internship experiences looking for jobs in IB.
I think they're just doing this to save face. Looks pretty bad to completely axe your internship program during a pandemic when that's all the media is talking about. Once the pandemic goes away and the focus shifts to the economic/financial crisis, banks can easily cut these interns a few months into FT, because layoffs make more "sense" then.
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