What is the point of "being in a revenue-generating position?"

lionheart's picture
lionheart - Certified Professional
Rank: Orangutan | banana points 322

After reading multiple threads on front office vs. back office, the phrase that I see often is "You always want to be in a revenue-generating position when you start your career."

Just curious to see why this is so. Why is front office looked upon so much higher than mid/back office? Now if we are only comparing positions within an Ibank I would understand this, but I have also seen this phrase used when comparing positions in different industries (for ex. audit vs, finance at an Ibank; many have said that audit would be better than the Ibank because it's revenue-generating, regardless of the fact that pay in finance is much higher).

Sorry if this question sounds asinine. Would like to hear your guys' opinions.

Also, I would like to hear your opinions regarding audit at Big 4 vs. F500 Finance Rotational Leadership programs in terms of future opportunities in corporate finance (not necessarily IBanking). Even though the later is non revenue generating, many on this board have looked upon these programs very highly.

Thanks.

Comments (12)

Jan 7, 2009

it used to be the bonus.&..oh yeah and the skillsets and exit options.

We're about to enter a Great Depression.
Don't you want a president who's already dressed for it?

I'm making it up as I go along.

Jan 7, 2009

No matter how good you are at a job that does not generate revenue you can only do as well as the revenue generators and the amount of cost incurred. A single revenue generating managing director can give enough revenue to cover the expenses of an entire team for a few years with a single deal.

Who do you want to be.

Jan 7, 2009

People... keep in mind that the front office is first in line to get laid off these days while mid and back office are far more in demand with recruiting..for example the quant people, all getting more jobs.. Now where do you really want to be? Bonuses are going to converge soon enough...

Jan 11, 2009
gogetter:

People... keep in mind that the front office is first in line to get laid off these days while mid and back office are far more in demand with recruiting..for example the quant people, all getting more jobs.. Now where do you really want to be? Bonuses are going to converge soon enough...

Front office and back office bonuses will never converge. Back office has much more of a chance getting laid off than front. If worse comes to worse, FO employees start doing their own BO work. This is probably the dumbest post I've ever seen. Absolutely retarded, actually.

Jan 13, 2009
nystateofmind:
gogetter:

People... keep in mind that the front office is first in line to get laid off these days while mid and back office are far more in demand with recruiting..for example the quant people, all getting more jobs.. Now where do you really want to be? Bonuses are going to converge soon enough...

Front office and back office bonuses will never converge. Back office has much more of a chance getting laid off than front. If worse comes to worse, FO employees start doing their own BO work. This is probably the dumbest post I've ever seen. Absolutely retarded, actually.

Hahaha. Considering the average level of posts on this forum (see: "22 year old going to formal" and "how does models and bottles work?") this is very harsh.

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Jan 7, 2009

even if bonuses converge, they'll quickly diverge again.

corporations will always value the people who bring in the cash most highly, and compensate them the best as well.

i don't necessarily think it matters as much where you start out, but if you ever want to rise really high in the corporation, at some point you're going to need to be in a position where you're generating revenue. but agreed, if you want job security, you might be better off working in the mid/back office. then again, you might also be better off working for the government.

as for the choice you're facing, i'd say talk to the people and see what you like better. i'm not sure if big4 audit is more/less prestigious (it could be either, i just have no idea)than the f500 rotational program. think about what fits better into your overall goals, what the job requirements are for each etc. (for ex, i wouldnt be surprised if you were traveling a lot and working somewhat shitty hours in big4 audit, vs 9-5 m-f at f500).

people on the board look on f500 corp fin very highly because a lot of times after an mba, these people are hired to be associates into banks. essentially, they take the "skills/experience" they have in what is effectively a mid office function for a corporation like GE, and move to an industry that needs that experience for its front office (financial services).

Jan 7, 2009

Think about this. The only thing that matters at a bank is money. Back office is a cost. They generate nothing and really just support the people who make money.

The front office guys generate revenue, they're the reason the bank exists. If it wasn't for the bankers, traders, salesmen, ER, IM, PWM, etc. the back office guys, would have no job.

Jan 7, 2009

....

Jan 7, 2009

to clarify, i think the definition of front office is just changing a bit now. we're seeing a higher demand for risk understanding from analysts because of the economic crisis. risk was considered to be more on the mid-office side before, while now the risk people are being put to the front lines... banks are moving towards having the quant/risk side people who both understand the numbers in depth AND have client skills to step up now...

Jan 8, 2009

True MO/BO roles are usually pretty mind-numbing as you do the same thing everyday and can only react to what the FO does. I would know, I'm a fund accountant. My advice is, unless you're about to apply to Starbucks, don't do it.

Jan 9, 2009

This is the same as a 6 foot 4 inch 250 pound guy who runs a 4.3 40-yard saying "why would i want to play football for the giants when i can just work in the front office"

Jan 11, 2009