Graduating into a Bad Economy

People graduate into bad economies every 5-8 years. 2008-09, 2001-02, early 90's, late 80's, early 80's, late 70's,...and on it was and will be through time.

All you can do is bust your ass and eventually it will work out.

I understand your point but I really don't think your perspective is that reassuring. The reality is, despite those of you that graduated in 06/07 also facing tough times with the economy, you guys are much better off than those that are graduating now. At least you have direct experience and easier to find a job. Difficulty finding jobs, figuring out the best way to get into a top MBA, taking on jobs that's not the 1st choice, etc, are problems we all face at this point. But your experience puts you in a much better position than those without.

With that said, I don't think anyone regardless of when they graduated, should be making excuses. At the end of the day, we all have to hustle and grind. You'll never always be at the right place and right time. If you don't learn to create opportunities for yourself, you'll never find success in the long run.

Btw for full disclose, I graduated in '09 and luckily got an offer with Big 4, so I am fortunate to be employed. But I can understand those graduating now's sentiment in feeling discouraged because I was trying to recruiting during absolutely shitty times. It's dreadful thinking that after four years working your ass of (for the most of us), you can't even get a chance to interview. By no way am I saying you're wrong. I just think it's hard for those graduating now to understand your pains when they can't help but only see theirs.

The difference is you could have stayed on at your bank and became an associate no? Could you not have stayed at your PE firm? Could you not go right back into banking right now?

Graduates in bad economies don't have those options usually, they can't get their foot in the door to begin with.

What is the typical route after pe 2yrs?

^some will go to HFs and other firms directly too

Comp, are you in bschool now?

I know someone who graduated from my target last year, didn't get his BB offer on a long-term bond desk, and is now day trading on his own.

Pre-MBA buyside experience is almost mandatory for post-MBA buyside jobs.

I have to agree that this isn't too reassuring. It's more important where you start off earlier in your career because that is what is going to have the largest impact on your career trajectory. So all those kids who came out in '06-'07 with sick IB jobs at BBs and great deal experience are going to be in a much better position than a kid from '09-'10 who can't even get their foot in the door because there are very limited spots in the financial industry. Yes it sucks for those bankers recruiting for PE who hit it during the downturn, but they have many more options than the kids coming out of undergraduate who can't even get the requisite experience to make it in the financial industry.

Graduating in 2007 is orders of magnitude better than graduating in 2008 or 2009. At least you have some experience under your belt, and can use that to find another decent job, even if it isn't the stellar job you had in mind. Graduating in 2009 and not getting any offers (and thus work experience) is far worse. You might end up selling real estate or taking other shit jobs that can permanently affect your career trajectory.

I saw this when I graduated in 2002. A lot of wannabe VC guys, startup founders and programmers couldn't find any jobs, and I know of at least one guy that just gave up looking for work and got a job at Athlete's Foot.

If its any comfort to anyone, 2007-2011 has probably been the worst four years on the street since the Depression.

CompBanker:

After reading through the thread on the 2011 hiring freeze, I'd thought it would be valuable to share with the community the thoughts and experiences of someone who graduated into a good economy. While it is easy to sit back and say that my class had it easy compared to today's graduates, this argument only goes so far. Here is what happened to the 2007 grads:

I was fortunate to graduate in 2007 when the economy was great and jobs were abundant. In fact, I secured my IB job in the Fall of 2006 when times were even better. Myself and my classmates all started work in Summer '07 post-graduation. Things were great, work was plentiful, and we all got paid. Then the recession hit in Fall '08. Work dried up and pay went down. People started getting fired. A lot of them. Entire banks collapsed and armies of qualified people lost their jobs. Industry cut back and all of a sudden no one was safe. Small businesses and start-ups failed as no one was spending money. A huge collection of '06, '07, and '08 grads were made redundant -- cast out into an economy where no one was hiring.

Meanwhile, those of us who were part of 2-year banking programs were on the market pursuing our "exit ops." Come Summer '09, we too would be out on the streets. When PE recruiting hit for the '07 grads, opportunities were bleak. PE firms were reducing their associate intake as deals weren't getting done and they didn't need as high a headcount. Previously, analysts in my program had near 100% placement into PE, and great PE names no less. For my analyst class, only the top performers (~20%) were able to secure PE roles. The rest begrudgingly accepted 3rd year offers. Some took middle office industry jobs, some got frustrated and ended their analyst years unemployed.

For those of us who did secure jobs, we lived in constant fear that our PE firms would implode or cut us before we even showed up for our first day of work. For some people, this was true. A number of PE firms pulled the job offers they had originally extended, offers that analysts were counting on for when they finished slaving away in investment banking. Other PE firms were less forgiving, not opting to slash associates until a few months after the associates started working -- after they had signed expensive leases and spent their banking bonuses in anticipation of receiving a monthly paycheck and other future bonuses.

I admit, I got lucky. My PE job was still waiting for me when I finished banking. They had decided to reduce associate headcount prior to hiring, so I was safe. I worked for two years and got a fantastic experience, mostly because there were fewer associates so I got staffed on more deals and covered more portfolio companies than my predecessors. A number of deals fell apart, but miraculously the ones I got staffed on all got completed and I was able to stuff my resume with closed transactions. Things were looking up and all that was left to do was to apply to business school -- surely the economy would rebound by the time I graduate b-school in 2013...

But this year was different. Harvard Business School elected to diversify its MBA class away from finance and consulting in favor of less traditional candidates (http://management.fortune.cnn.com/2010/12/17/harvard-biz-school-to-wall…). All of a sudden even the superstars from Megafunds found themselves with no acceptance in hand and the prospect of being unemployed in Summer '11. HBS caused a trickle down effect in MBA programs as the finance superstars scrambled to pull together applications to lesser schools. In the end, a lot of '07 grads found themselves looking for employment again this Summer. This put them in a tough situation though, they had a number of options, but few were appealing:

1) Negotiate to stay on another year at their PE shops and try again at MBA admissions the next year. 2) Lateral to another PE shop and "re-do" their pre-MBA associate years. 3) Try to skip the MBA altogether and secure a post-MBA job. 4) Leave the industry.

Option #1 wasn't available for many and option #2 meant a two year career set back. Option #3 was preferable, though even HBS MBA students with IB/PE experience were struggling to find post-MBA PE jobs; competition was fierce. Many folks I know were forced into option #4, though I admit that some of my friends are a lot happier now as a result.

Obviously luck plays a huge role in any given person's situation, but you can't wait around to get lucky. So folks, before you throw your hands in the air and claim that you never had a chance, realize that everybody has had to fight for their place on Wall Street, regardless of when they graduated.

I think we've found 2011's Humblebrag of the Year.

CompBanker:

After reading through the thread on the 2011 hiring freeze, I'd thought it would be valuable to share with the community the thoughts and experiences of someone who graduated into a good economy. While it is easy to sit back and say that my class had it easy compared to today's graduates, this argument only goes so far. Here is what happened to the 2007 grads:

I was fortunate to graduate in 2007 when the economy was great and jobs were abundant. In fact, I secured my IB job in the Fall of 2006 when times were even better. Myself and my classmates all started work in Summer '07 post-graduation. Things were great, work was plentiful, and we all got paid. Then the recession hit in Fall '08. Work dried up and pay went down. People started getting fired. A lot of them. Entire banks collapsed and armies of qualified people lost their jobs. Industry cut back and all of a sudden no one was safe. Small businesses and start-ups failed as no one was spending money. A huge collection of '06, '07, and '08 grads were made redundant -- cast out into an economy where no one was hiring.

Meanwhile, those of us who were part of 2-year banking programs were on the market pursuing our "exit ops." Come Summer '09, we too would be out on the streets. When PE recruiting hit for the '07 grads, opportunities were bleak. PE firms were reducing their associate intake as deals weren't getting done and they didn't need as high a headcount. Previously, analysts in my program had near 100% placement into PE, and great PE names no less. For my analyst class, only the top performers (~20%) were able to secure PE roles. The rest begrudgingly accepted 3rd year offers. Some took middle office industry jobs, some got frustrated and ended their analyst years unemployed.

For those of us who did secure jobs, we lived in constant fear that our PE firms would implode or cut us before we even showed up for our first day of work. For some people, this was true. A number of PE firms pulled the job offers they had originally extended, offers that analysts were counting on for when they finished slaving away in investment banking. Other PE firms were less forgiving, not opting to slash associates until a few months after the associates started working -- after they had signed expensive leases and spent their banking bonuses in anticipation of receiving a monthly paycheck and other future bonuses.

I admit, I got lucky. My PE job was still waiting for me when I finished banking. They had decided to reduce associate headcount prior to hiring, so I was safe. I worked for two years and got a fantastic experience, mostly because there were fewer associates so I got staffed on more deals and covered more portfolio companies than my predecessors. A number of deals fell apart, but miraculously the ones I got staffed on all got completed and I was able to stuff my resume with closed transactions. Things were looking up and all that was left to do was to apply to business school -- surely the economy would rebound by the time I graduate b-school in 2013...

But this year was different. Harvard Business School elected to diversify its MBA class away from finance and consulting in favor of less traditional candidates (http://management.fortune.cnn.com/2010/12/17/harvard-biz-school-to-wall…). All of a sudden even the superstars from Megafunds found themselves with no acceptance in hand and the prospect of being unemployed in Summer '11. HBS caused a trickle down effect in MBA programs as the finance superstars scrambled to pull together applications to lesser schools. In the end, a lot of '07 grads found themselves looking for employment again this Summer. This put them in a tough situation though, they had a number of options, but few were appealing:

1) Negotiate to stay on another year at their PE shops and try again at MBA admissions the next year. 2) Lateral to another PE shop and "re-do" their pre-MBA associate years. 3) Try to skip the MBA altogether and secure a post-MBA job. 4) Leave the industry.

Option #1 wasn't available for many and option #2 meant a two year career set back. Option #3 was preferable, though even HBS MBA students with IB/PE experience were struggling to find post-MBA PE jobs; competition was fierce. Many folks I know were forced into option #4, though I admit that some of my friends are a lot happier now as a result.

Obviously luck plays a huge role in any given person's situation, but you can't wait around to get lucky. So folks, before you throw your hands in the air and claim that you never had a chance, realize that everybody has had to fight for their place on Wall Street, regardless of when they graduated.

So did you manage to get a post-MBA job without the MBA?

Do you ever plan on getting your MBA in the future?

I have to agree with CompBanker here. I also graduated in 2007 and worked for a bank that is just an empty shell now. I'm not sure which is worse: getting your "foot" in the door but not having enough experience to lateral/jump to PE and thus, were pushed out of the industry, or not getting in at all. I had a bunch of friends who got laid off; the majority of them are no longer in banking (but also much, much happier).

I'd echo CB's sentiments that I've been consistently "looking over" my shoulder for the past few years. When I first joined my current PE shop, we had layoffs in the first 3 months I was here. The layoffs were the first in the firm's history. Definitely not a pretty picture. That being said, we've run pretty lean on the junior front and i've been lucky enough, like CB, to get a ton of deal experience. We haven't hired anyone on the deal side in a few years and are just starting to do so. From what I understand, in years past, we had "associate classes" like all the other firms. Now, we just play by ear.

At the end of the day, it's definitely an interesting life experience. I"ve been on the hop my whole working career but on the plus side, I don't think it can get much worse.

Some people are pretty out of touch with reality if you think it couldn't be much worse coming out as an 06 or 07 grad with legit experience. Having just graduated in May 2010 from a non-target I can tell you I have my work cut out for me the next 5 years if I want to be where I envision myself.

Comp - are you in bschool/HBS now?

Nope, I didn't make it into b-school. In fact, HBS didn't even grant me an interview.

To some of the comments above, I'm not saying that it was worse to graduate in 2007 than it was now. I actually agree that graduating directly into the recession is worse. My point is that no matter what year you graduated in, the herd got thinned considerably over the last few years. Right now there are still investment banking and PE jobs, they are just currently going to the top performing and best pedigreed/connected students and analysts.

As HerSerendipity pointed out, for those of us in the industry over the past few years there has been a lingering fear of losing our jobs. We've witnessed countless peers, often times for no fault of their own, fired as the industry rationalized itself. From my experience, high finance is not an industry where you can join, leave, and re-join at various points in your career. There are defined entry points (after undergrad, after b-school) that few are able to circumvent. Once you've been unemployed or working in a different capacity for a few years, it is far less likely that you'll ever be able to break back in. A lot of people got forced out from 2008 - present, and at this point they'll be sitting on the sidelines for the rest of their careers.

Haven't read the whole thread, but will share my experience.

While it was almost impossible to get the initial banking job for those entering in 2008/2009, if you did, you had headhunters and PE firms falling over each other to get a piece of you. Basically when the upturn came along, there was a shortage of qualified analysts at the banking level, and if you were there from the start you had a big leg up.

Also, the industry tends to overreact to things and cut headcount much more than feasible for the business. Don't be discouraged if you don't get the initial offer for your dream bulge bracket firm, as I saw many lateral hires come through to bolster the initial ranks as time went on.

Hope that helps

I met with a CFO for a large corp on the NYSE the other day to network and discuss career options and ways to break into IB. This guys has great connections with countless boutiques and several BB's and even he said "I'll see what I can do" but in no way was a guarantee. During 05-07 with the connections I've made, I would have a job at JPM or Goldman probably with relative ease.

Now I may have to settle for a local or mid-tier boutique at best (and that's even if I can get that). To hedge in case I get screwed, I playing both sides of the fence with Big 4 accounting and IB. I had an interview with Deloitte the other day but even that's not a guarantee and I've made tons of great connections with Big 4 firms over the years too. If everything goes south, hopefully i'll at least be able to score a job with transaction services at Deloitte and try my best to break in that way.

I see your point OP and don't resent your class in any way but to say you didn't have it much easier is not being fair at all. Just my two cents

CompBanker:

Many folks I know were forced into option #4, though I admit that some of my friends are a lot happier now as a result.

I find that difficult to believe. Would you trade jobs with those folks if it meant being happier? If no, are they really happier? Would trading places make you happier? I am sure your friends that got forced out of the business would happily trade places with you, though they may not admit it.

Is HBS admissions even worth mentioning if the point of your post was to try to relate your situation to young people who have been unemployed/underemployed for years? I don't think that helps.

A macro bond trader MD once told me, this is the only business in the world which always over/under hires especially at the major firms and mainly the BB type. If you graduated in 2006/2007 you were most likely in the overhire group and if your graduating in 2011/2012 most likely in the underhire thing. I would say the last 5 years have for sure shown this and this thread further explains this.

You may be given a head or late start, but in both cases its a marathon. All the top people in this industry really kicked up a notch after 10 years or more into their careers. All the forced layoffs probably never should have been in it to begin with as they were not there for the long haul, while those who give up after not being able to land an on-campus job probably never were in it for the long haul either.

Great thread everyone Archived

How do people see prospects for the class of 2013 and on?

Here's a breakdown (based on my experience and what I see on this site, I could be wrong):

2007 - Good 2008 - Very bad 2009 - Also very bad 2010 - Better than 2008/2009, but not anywhere near 2005-2007 levels 2011 - Back to 2008-2009 levels 2012 - Recruiting cycle just about complete, same as 2011 2013 - Estimated to be just as bad as 2011/2012

^^^Not exactly scientific, I know.

I know this is an old thread but somehow came across it and it's pretty topical now with the markets crashing. When you were in banking during '08 did your bank rescind any full time offers and have you heard of other MMs doing so, as I know that most MM banks don't overhire like BB's? I'm going to be interning at a MM bank this summer and am fearful of either not getting a return offer because of a potential market downturn, or getting an offer only to have it rescinded.