From the monthly archives:

June 2009

Although the traditional route to finding an investment banking job, such as on-campus recruiting and working with headhunters, remains popular, an increasing number of people are turning to networking as a way to landing their next job. This is especially critical now, due to the downturn in the economy and cutbacks in hiring by banks.

In addition to high marks from a name brand school, investment banks place a lot of emphasis on personality fit. So building relationships with people in the industry is a key advantage. Many interviewers and hiring managers prefer to hire people who have been recommended by someone they know and trust. This is another reason why personal networking is so important in the job search process

The first step to take is to thoroughly familiarize yourself with the industry. You need to speak the language of investment banking, know the terminology, be aware of current financial events and the latest M&A deals being negotiated. Chances are, you already read the Wall Street Journal every day and use various online websites to hone your knowledge of the investment banking industry.

Naturally, you will also have crafted your resume, distilling the most important examples of your experience and unique skills down to one page. You may be sharing this with people as you network.

If this is your first job in investment banking, start networking with friends and acquaintances first who may be in the financial services industry. Find out if any of them are in investment banking, or know someone who is.

The key to these and other networking efforts is to consider them “informational interviews.” Yes, your ultimate goal is to land a job. But the stated purpose of these calls, emails and interviews is to explain that you are interested in the field and seek their advice and experience. People generally do not mind advising others and often extend their help readily.

This could be a starting point for a relationship with this person that you may one day leverage in the hiring process. Or you can ask “is there anyone else you know that I can speak with about opportunities in the industry” and tap into their network of contacts as well.

The Internet can help tremendously with this process. New social networking sites such as LinkedIn, Facebook and make re-connecting with old friends and school mates much easier. These sites also offer online communities of investment bankers on networking sites and blogs to start building your connections.

Next time, we’ll look at some other fertile areas to build your investment banking job network.

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When the interviewing for an investment banking job gets to the final stages, you must still wait until they actually say they are interested in hiring you before entering into a discussion of actual numbers.

Many recruiters and industry insiders say you should never accept or reject the initial offer, no matter how good or bad it sounds. Instead, you should always express your gratitude for receiving the offer, politely thank them, reaffirm your enthusiasm for the job, and say you need to think it over for a few days.

Let us repeat what we said before: you are going to negotiate this offer, no matter what. They expect you to. It would seem almost unprofessional not to. Reputable employers will give you a few days to a week to consider their offer. Walk away leaving a positive, enthusiastic impression and start working on building your case.

This is where your earlier research comes in. If their offer is below the industry norm, you will have the evidence to prove that. If their offer is in the mid-range, you have time to build a case, perhaps based on your unique skills, experience or abilities, for them to pay slightly more. It’s not unusual to bump up even a good offer by 5 percent or more simply by asking. If you are currently employed in the industry, you should aim for a 20 percent increase over your previous salary to make the switch worthwhile.

It also helps if you have at least one other iron in the fire. If this is the only prospective offer you are entertaining, it is much more difficult to walk away from the negotiating table. However, if you can say to them (truthfully), “I need some time to compare this offer with one from ABC Company, which was slightly higher,” then you clearly are in the driver’s seat (providing you would actually want to work for the other company).

Companies will always want to pay you at the lower end of a salary scale. But good companies do not want “bargain basement” employees, either. They want quality professionals who will help grow their business, and are willing to pay a fair price for that.

Also, remember that everything is negotiable. Salary is just one component of your compensation. Put together a package of what you are looking for, including paid vacation, benefits, training and more. Many companies give out signing bonuses to new hires as a way of sweetening the offer without straying outside their salary range. If the employer is unwilling or unable to budge on salary, negotiating these other benefits gives them the option to reward you some other way and seal the deal.

Finally, when you have agreed to all the details, be sure to get it in writing. Follow up with a letter which summarizes when you will begin work, at what salary, and include all the other details of the compensation package. This is both professional and absolutely essential to avoid any misunderstandings later on.

Negotiating one’s salary is an uncomfortable area for nearly everyone. But keep in mind that, in most cases, if they have spent a fair amount of time interviewing you at several levels of the organization and make you an offer, they are clearly interested in hiring you. All that remains is to agree on the fine points of the compensation. Always express your enthusiasm for the job and eagerness to get started once these details can be worked out.


MIT Career Development Center

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Negotiating your salary and compensation package is an area of the job search process that gets far less attention than interviewing and networking. But if you’re fortunate enough to make it through three rounds of interviews with people at the firm, personality tests and perhaps a case study or two, and finally receive an offer, then you want to get this part of the process exactly right as well.

Industry insiders agree on a few major steps and rules in the negotiating process. First, get comfortable about negotiating. You may have so much time and effort invested in the interview process that you’re ready to jump at the offer (especially if this is your first job in investment banking). But keep in mind that any prospective employer expects you to negotiate. Anything less would be selling yourself short. Negotiation demonstrates that you value your skills and what you bring to the firm, and want to be properly compensated for it.

Second, think of the negotiating process as a win-win situation. You are not trying to outsmart the employer but instead, trying to reach an agreement that suits both of you as much as possible.

The most important step in negotiating your compensation package is upfront research. Check out compensation surveys online, such as Job Search Digest’s annual compensation surveys, and our ongoing job lists for positions like the one you’re seeking. These will give you an accurate idea of what other firms are offering. You can also check online compensation surveys at or

Research will help you develop a specific salary range that you are willing to entertain for your own compensation. The industry stats will also be useful when you get into the actual negotiations, as way of proving what you are asking for falls within industry norms.

By the way, many experts recommend that you NEVER bring up the subject of salary or compensation first. Avoid discussing the topic until they have actually made a job offer. Simply deflect the question with a “we can work out the compensation details later on.” Not talking about salary or compensation gives the impression that you are more focused on the job itself, rather than just the money.

If an interviewer is intent on finding out exactly how much you want, it could indicate that they are just “kicking the tires” or perhaps do not have a decent enough budget to hire and pay a qualified person what they’re worth.  Either way, keep your cards close to your vest, as they say. You do not want to commit to a salary range that is lower than they are willing to pay. Nor do you want to devalue their perception of what you are worth by quoting a low range, or put a premature end to the interview by quoting too high a figure.

Next time we’ll talk about when you should begin a discussion of actual salary numbers, and how to negotiate a job in investment banking from a position of strength.

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Are Bonuses On The Way Out At Investment Banks?

June 17, 2009

Critics argue that big bonuses fuel a culture within banks to seek short-term profits by making overly risky bets in various markets, such as the sub-prime market. The issue heated up after insurance giant AIG awarded bonuses to executives in the very unit that caused many of the firm’s financial problems, sparking more public outrage […]

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Investment Banking Job Compensation

June 15, 2009

If you thrive in a highly competitive environment and have the stamina to work long hours and six or seven days a week, then you’re a good candidate for a job in investment banking and the sizeable compensation packages that go with it. That compensation package can average over $400,000 a year, according to a […]

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Investment Banking Job Interview Questions

June 8, 2009

Investment banking job interviews are known for being among the most grueling in the industry. You can’t expect to make it to the second round without preparing extensively. So before going to your investment banking job interview, make sure you’ve done your homework, learned about their firm, and prepared answers to at least the top […]

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Mastering the Investment Banking Job Interview

June 3, 2009

In addition to learning all you can about the firm where you’re interviewing, you should also try to learn about the key players in the firm. Many well-known investment banks host campus events that offer excellent educational and networking opportunities. Be sure to check your school’s alumni list for people who may work at that […]

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