Useless shower thought
Drunk 'Shower thought' here.
Would it ever be feasible or even useful for investment banks to create those sort of rotational grad programs that corporates have. The graduate rotates between IBD, S&T, AM, ER, corporate banking, maybe even some middle office roles. All divisions are continuously well-staffed so no division has a shortage of juniors because someone rotated out.
Some already do, or at least did, except it's not restricted to the capital markets. It's across the institutional business, so basically corporate banking, risk, capital markets etc. Know someone who did this at Citi back in the day. They do 3-6 month attachments with each group, sometimes in different geographies.
ah yea I know of those. Was thinking more of the front office IBD/ ER roles
I think it would be great, though don't see a lot of value going acoss banking/S&T/ER.
Doesn’t JPM do that?
Speaking only for IB, I think you need at least 6 months on the desk (depending on dealflow) to really have a good understanding of the role. A rotational program may make sense on paper, but I’m not sure how much you’d get out of it if you have to rotate out before really hitting your stride.
100%. 3-6 months in a specific group gets you up the curve to hit baseline really. That's two groups for a 1-year program, 4 for 2-years. Question is what kind of finished product does that get a firm versus just hiring an analyst and putting them through the paces as usual. Sure a rotation person probably gets a more holistic view and understanding of product, but is that really useful at the analyst level? I don't think so.
What could work is probably more tailored. E.g., a sponsors rotation could look something like coverage, M&A, LevFin, credit risk.
I know folks who work in jobs that do these types of programs and they constantly complain.
The issue is that if you have a jr population that is shifting on you every 3-5 months, those individuals are highly aware that they can try less on certain teams that they aren’t interested in. They are always “in learning mode” so you can’t really reprimand them and they produce mediocre work. High stress jobs require accountability and ownership over work product. If they know they’re leaving in 2 or 3 months for another team they might not try as much as they otherwise would
Generally these are great in theory. In practice it doesn’t work well (for particular industries). Don’t think IB would be a good industry to implement
this
It’s an interesting thought I’ve had as well and from what I hear there used to be more opportunities to rotate within banks organically (e.g. my former BB used to allow rotating between IBD teams as well as international rotation).
This model is also used by (English) law firms (at least that’s where I’m aware of it) during their trainee program. There, you get mandatory rotations every six months between teams as well as secondments to international offices.
However, at my old place these opps were heavily on the back foot (even within IBD). Doing this across divisions, besides compliance issues, probably also has limited synergies compared to the opportunity cost.
In my opinion, banks likely just take the view that (i) why would you force an M&A guy to do ER and CB when he made the decision not to pursue these careers, (ii) it’s costly to have such a program and the benefit for the firm is not tangible, (iii) even if there were such benefits you’ll still go to PE after two years so why do this, and (iv) let’s maximise value for the firm, which means they don’t want to pay you full salary for two years (let’s say) during which you will continue to suck because you won’t ever get to a necessary level of proficiency in any field. Personally, I would not join a program that made me rotate to places I don’t want to work in if I have the option to do pure-play IB.
Happy to be wrong, however and the last point is purely personal.
Rotations between related IBD teams would be great as described in the other comment, but I guess here also teams are too egoistical not wanting to give up people and HR / business management simply do not care enough to put in the effort.
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