MBA grads at the very top business schools are pursuing investment banking jobs and other finance positions in record numbers, reports the Wall Street Journal. Recruiting at the big MBA schools hit a post financial-crisis high of 39% of job-seeking 2011 grads at Harvard and Yale, 36% at Stanford and a whopping 51% at Columbia Business School.
Despite the news of major layoffs in the sector, shrinking bonuses and the highly public protests against Wall Street, MBAs are still charging toward finance jobs for the same reasons as they were before: money and prestige.
But those landing jobs right now are entering an investment banking industry that is undergoing massive change. The big banks are tightening their belts as revenues from proprietary trading disappear, regulations tighten, and investors flee in the face of market turmoil. This new crunch could dim prospects for MBAs in future years, as well as dampen prospects for those with 3-7 years of experience.
“You’re vulnerable if you’re in that five-, seven- or nine-year range,” said Alan Johnson, managing director of compensation-consulting firm Johnson Associates Inc. “You’re expensive and you don’t have clients.”
Johnson added that investment bankers with roughly 5 years of experience can command compensation in the $400,000 range. While new hires from the top business schools can expect about one-third that amount.
This could explain why some banks are continuing to hire at the entry level even as they squeeze costs. However, the director of career services at Yale reports that investment banking recruiting and hiring is beginning to slow down, amid the uncertainty.
MBA students at Harvard and other schools are adapting to this new, changing environment. They’re exploring smaller, boutique investment banking firms and venture capital firms. The Journal article interviewed John Tough, a second-year student at University of Chicago’s Booth School of Business, who interned at venture-capital firm Kleiner Perkins Caufield & Byers over the summer and said he plans to look for openings at other venture-capital companies. His school friends are broadening their search for finance jobs in the corporate sector as well.
How about you? If you’re looking to land a first job in investment banking or switch firms, what are you doing to improve your hireability? Add your comments below.