A friend of mine, who is a VP at a pretty well known mm firm, is trying to dissuade me from getting into banking. He keeps suggesting that banks aren't really hiring associates (especially those without a great deal of xp) and that VPs are now forced to do a lot of the work that Associates used to do.
What do you guys see from where you sit? Is this true? Is the associate a dying breed, or is this utter nonsense?
Thoughts are appreciated...
BR
EXTREMELY INTERESTED AS WELL!!!!
Banks seem to really only be hiring associates from their summer classes, so it seems frozen outside internship recruiting.
VP's are being asked to do more because they weren't really doing much anyway. They are usually first on the chopping block since they do not source deals nor do they complete the actual grunt work. Associates will never be a dying breed because it is impossible to become a VP without being an associate.
No, I wouldn't recommend putting off an MBA. It's too cyclical. Who knows what it will look like 2-3 years from now. Those who were doing FT associate recruiting from the 2011 class had a good year and those who were forced to do it this year were not as fortunate.
In general, those who want to do IBD who are in business school do not come from banking. If you want to get an MBA in order to switch into banking then it makes sense to do that as soon as you're ready since you will start as an associate 0 regardless of your age. Impossible to predict associate recruiting 2-3 years from now.
Didn't someone mention about intellectual gap in banking somewhere on WSO? Like MD is doing VP's work, VP is doing Associate's work and Associate is doing Analyst's work and Analyst is on FB at work. And we are seeing more shops having a lot of MDs and a few VPs and almost no Associates and Analysts.
I have seen similar things with consulting firms. Basically the people at VP level are there because they stood out of their associate class...so the firm wants to keep them. But it becomes more and more hard to justify their salaries...so the firm hires less Associates to make up for it. Then, when there are not enough people to do the work, VPs inevitably go back to doing Associate level work. Seems backwards, but like I said, it's a reality at some places.
I would be curious if this is going on in IB.
I agree with MD8...there is no way to predict what the hiring would be like at any point, so you might as well go and hope for the best.
I've also seen the lack of associates at some places. I know some guys that work in DCM at a fairly large IB. One guy just got promoted from analyst to associate. Before the promotion it was just him, as an analyst, and the MD...now it's still just him and the MD, though he is an associate. This is similar to another 'group' within DCM where the guy was an associate and the only person besides his MD. He got promoted to VP and now it's him and his MD. They basically do all of the work outside of the deal sourcing but do have the ability to leverage some analysts that are pooled up and work across the whole DCM space (or at least that's how it's been explained to me). It's my understanding that they hardly ever do that (because it's a huge hassle) so they essentially are doing all the work a VP would do and below. That's great if you are a VP and getting paid, probably less great if you are an analyst working 'up'.
Regards
When I sit in on banking pitches (which is admitedly fairly rare) there always used to be at least one associate carrying the pitch books and sitting quietly in the corner occasionally whispering something about a particular assumption in a model.
Now its the VPs that carry the pitchbooks and doing the whispering
Well, I was hired as an associate with no experience for this year's IB training class at a BB and there seems to be quite a few people in my class. I am not sure how it breaks down group-to-group, but it looks like IB (not inluding S&T or anything else) at my bank is taking in about 40-50 analysts and 30-40 associates.
Although I have not started yet, it seems peculiar that banks would shed analysts and associates this aggressively since they most of the grunt work and are not nearly as well paid as VPs and above. The only reason I can think of is maybe deal flow in one particular group has ground to a trickle.
In terms of using this issue to dissuade you from entering banking, I say do not listen. If banking is what you want to do, do your absolute best to get a job no matter what. Who knows what it is going to be like in a few years, especially if this Europe situation actually gets solved.
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