Spare a thought for the 18 or 19 year-old university student with an interest in working in an investment bank. Over years, the investment banking recruitment process has become incrementally more relentless. Once upon a time, it was possible to apply for an investment banking job early in the third year of university, before graduation. Not any more.
In the early 2000s, banks’ graduate recruitment process changed. It suddenly became necessary to get a summer internship in your second year and to use the internship as a vehicle for gaining a job offer upon graduation. So far, so standard. But then, around 2014, it changed again. In Europe, banks began offering spring internships to first year university students. It then wasn’t long before good first year students who completed these spring internships were offered second year internships and good students from second year internships were offered full-time places. – To maximize your chance of getting a banking job in London, it became necessary to get on the recruitment conveyor belt in the first term (or early second term) at university, when most students have barely settled in.
Something similar happened in the U.S, although it was more that second year summer internship applications opened earlier and earlier (and earlier). In March this year, Yale University’s blog complained that students with an inclination towards banking were being made to apply for their second year internships in spring of their first year (sophomore year). “It really started in 2015, we saw the timeline for financial services moving towards the fall of junior year, and then last summer we saw it move to the summer before junior year, and now suddenly we’re seeing it in the spring,” said Jeanine Dames, head of Yale University’s career services offices. In spring 2018, students were already being asked to apply for internships in summer 2019, with the result that they were effectively being tied into banking careers as early as possible. Dames suggested this might be one reason banks have such problems retaining their graduate recruits: students commit to banking careers without exploring the alternatives and then leave when they realize the industry is not for them.
Banks have taken note, at least in terms of summer internship timelines. There’s no indication that the spring internship process is being scrapped, but the Wall Street Journal says Goldman Sachs and Morgan have both committed to stop chasing sophomores to apply for summer internships a whole 15 months early. From now, summer intern applications will go back to taking place early in the junior year in which the internships take place.
“We were contributing to an environment that pressured students to choose rather than to explore,” said Dane Holmes, Goldman’s top human-resources executive. “I want people who want to be at Goldman Sachs, not people who felt they had to say yes to an offer.” Matt Mitro, JPMorgan’s head of campus recruiting, said: “We found it was disruptive to students doing what they were supposed to do, which is study.”
Naturally, banks also have their own reasons for delaying the U.S. recruitment timeline. The Wall Street Journal notes that many of the students who came through the expedited process in the U.S. were, ‘white men who had informal ties to finance through family or friends,’ and who knew they had to get their acts together early on. As banks try to diversify and recruit more women and minority candidates, this didn’t make a lot of sense.
Sarah Butcher – Read the full article on efinancialcareers.com