I think based on WSO traffic and my own personal attempts to break into banking, I have to respectfully disagree with this article which argues that recruitment has become a problem at top BBs like Goldman Sachs and JP Morgan.
College students who were once attracted to prestigious banks like moths to bonfires are increasingly turning to other industries in search of success. Insiders say that harsh testimonials of industry life can deter would-be financiers from even applying for jobs at the most selective firms.“This is a significant problem for Goldman,” said Adam Zoia, the chief executive of the placement firm Glocap Search, whose clients include many aspiring big-bank employees and hedge fund workers. “Their perch of being the investment bank to go to is definitely at risk.”
What do you guys think? IBD maybe isn't what it was a decade ago, but for most of us risk-averse youth, it's still among the strongest options, right?
I like how this kid from Yale decided to opt out of applying to HFs and banks to pursue being a playwright. While that's nice, not everyone has the means to "take a chance" and not go into finance, as this article seems to suggest. Some of us out there aren't rocking trust funds and can't afford to eat the opportunity cost of not going into finance because of some moral, social, or personal obligations.
As much as I wish recruitment were a problem for GS, I'm pretty sure that they aren't in crisis over the number of HYP kids applying every year.
I don't think this is a crisis right now. What I do believe it is indicative of, however, is a slow shift in general awareness and popular sentiment. A large part of human capital inflow into the industry each year is what I consider 'peer consensus,' e.g. the phenomenon at Princeton where dozens of juniors have no idea what they want to do but see a handful of their finance-focused friends prepping for interviews in the spring and decide investment banking is what they want to do.
When public opinion shifts, however, and the scale begins to shift the other way, I think you'll only have the diehard few left, the eager-eyed young monkeys who actually want banking for banking's sake, the born traders who gulp down risk and ask for more, and the brilliant analytical minds who identify risk vs. reward, investment vs. a sinkhole.
This isn't systemic. Finance will always enjoy an incredible number of prospective entrants. This is hardly a "crisis," and to be frank, it's the New York Times doing just what the New York Times does. It's media, and it needs to sell itself. Facts: - it's an election year - there's been increasing furor over the past two years surrounding the conduct of the entire Street - regulation has been a topic of public debate ever since the crisis - a massive op-ed piece dissing Goldman, the shining eye atop the pyramid of Wall St., has received international attention - it's an election year and "big business/Wall St." is a major campaign topic, whichever side they fall on
Boil all that together, and you're going to get an overdramatized flurry of "investigation," "insight," new revelations, etc. that in the end are nothing more than vapid scheming, the typical emptiness of our American mainstream media. It'll die down after the elections to quite an extent.
I tend to mostly agree with this view -- this was certainly the case for me when I was a confused junior at a target university and all of my friends were applying for finance jobs.
I'm curious as to what you think the scale might shift to if we're losing a little bit of love for finance. I think the answer that most would jump to is tech in some capacity, but it would be very odd to suddenly see folks jumping onto the computer science bandwagon to work at Facebook or Google. I guess STEM fields are the only other ones with high paying jobs and industry longevity, but come on, we're not all that smart. :)
I really don't see this. There are still thousands of resumes for every opening.
People who apply for financial services positions are not doing so because they think they are saving the world. I don't think I have ever heard somebody say "I'm going into banking to provide liquidity!" other than as a joke.
Now, if it came out that Greenpeace was funding its operations by clubbing baby harp seals, then their applicant pool would dry up immediately. But their employees work for moral satisfaction. Goldman's employees work for money. The only thing that would drive people from financial services is a massive pay cut.
I think finance enjoys a fairly unique paradigm where you don't need any substantive qualifications other than (a modicum of) intelligence, work ethic, and "likability." Tech, on the other hand, requires hard skills. The scale might well shift, but before the floodgates open, you'd need probably half a decade while graduating seniors found themselves unable to enter the industry for lack of qualification, current undergraduates begin to switch to STEM subjects, and college applicants begin declaring them right off the bat.
At worst, it goes from 100:1 applicants to spots with the top 10% getting jobs, to 50:1 with the top 20% getting jobs. Get it?
Nothing changes.
Besides trends over the last few years have shown the opposite ... more kids than ever want to break into ARE industry.
How the fuck is 100:1 10% or 50:1 20% ?
I wish we had a crisis.
I disagree but it is true that a lot of top talent from each school is becoming increasingly more interested in working for companies such as Google, Facebook or Apple. It's certainly not a recruiting crisis though as a lot of smart individuals want to work in finance, especially at a BB IB.
Also, I think the economy might be pushing people into these majors. Companies aren't hiring, so students turn to entrepreneurship. CS has vastly lower start up costs than, for instance, a consumer goods company. The media publicizing the million dollar pay days of people who get bought out probably also attracts students.
I don't want to get too sociological, but I think the decreased marriage rates and delayed creation of family units decreases the need for high incomes in young adults. They aren't thinking, "pay down debt, buy house, support family," they are thinking how they can extend college a few more years. If anyone saw the Bloomberg article on "bro-gramming", that is exactly what I am talking about.
I don't know. Maybe if Wall St. 2 hadn't sucked, we would be seeing the reverse trend.
For those who didn't see the Bloomberg article (myself included). These guys sound like huge tools, but interesting nonetheless:
http://www.bloomberg.com/news/2012-03-02/brogrammers-bring-frat-house-e…
I still don't really get it though -- software companies require, and I'm going to generalize a bit, a pretty specific skill-set whereas a lot of people can learn finance on the side through clubs, etc. Maybe I've been out of school for too long, but the top talent IIRC was mostly interested in finance or academia...there just don't seem to be that many people who want to be software developers.
I understand there are other positions at Google, FB, etc. but if you're gonna work a finance role at Google, might as well go all the way and work a finance role for more $.
the people working in finance at Google may like the work culture better. Typically tech companies are more liant on hours, as long as you do the work properly and get it done on time.
The Yale kid is a fucking joke... He didn't apply because he didn't want to do it -- he didn't apply cause he knew he wouldn't break in.
Judging from the number of applicants we've received for the March intake, I don't think we're in such crisis(?).
10 spots available....100 ppl apply, 10% get a spot..50 ppl apply, 20% get a spot
If there was a recruiting crisis then my friends would have gotten jobs this recruiting season. Let's just put it mildly and say things are more competitive than ever.
The problem that I see is that if IBD does not recruit the top 10% but instead aims for the top 20%, they lose their ability to charge clients exorbitant fees and thus, lose their ability to pay high salaries. This will cause a downward spiral in recruting.
And that's because as a client the millions in fees you agree to pay are directly related to the brightness of the guy fixing the commas in the slides you'll barely look at.
Finance is still overall pretty damn lucrative career choice. It will always attract a lot of competitive type A's looking to make it big. This correction I think is actually a positive trend. Last few years were more a distorted finance jobs landscape. For those who truly want to be in finance and like it, I think it's actually for the better.
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