A recent article by Marina Keegan, a Yale undergraduate, points out that the high percentage of Ivy undergrads who go into consulting and finance may have to do with how well those places recruit: Another View: The Science and Strategy of College Recruiting.
She writes:
"Sometime between freshman fall and senior spring, an insane number of students decide – one way or another – that entering the banking industry makes a whole lot of sense. A few weeks ago I interviewed over 20 Yalies to try to figure out why.
"What I found was somewhat surprising: the clichéd pull of high salaries is only part of the problem. Few college seniors have any idea how to “get a job,” let alone what that job would be. Representatives from the consulting and finance industries come to schools early and often – providing us with application timelines and inviting us to information sessions in individualized e-mails. We’re made to feel special and desired and important."
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Vikram Rao, who brought the article to my attention, writes
"... I thought one of the interesting points of the article is that these companies do a very good job of getting to the best students quickly (seems like an unraveling market) by recruiting in the fall, spending lots of money on recruiting, and presenting students with a well-defined process. I know from personal experience having gone to Princeton that they also do a very good job of outlining the parameters of the job market (i.e. if you intern with us/apply for full time with us at this time, then you will receive an offer at time X for Y dollars with roughly Z probability). Their interview process is also extremely efficient. The article makes the point that most college students don't really know how to find a job. These companies eliminate a lot of this uncertainty by having such well-established recruiting timetables and processes.
"Having just gone through the post-collegiate job market, I can say that this alone is worth a lot. In addition to lower salaries, the majority of other professions do not present such a clean-cut "do this, then this, then this" approach to recruiting and instead require that you go through contacts or wait long periods of time without much certainty to get a job. The banks and consulting firms also do a good job of convincing applicants that "if you work here, you can do a, b, or c afterwards", whereas many other industries do not make such claims. This is an interesting market design perspective on I-banking and consulting recruiting - I don't think America's youth is suddenly much greedier than it once was and is drawn by large salaries. Certainly some people are, but not all. I think what the I-banking and consulting firms really offer is 1) they recruit early, 2) they offer a very well-understood process towards getting a job, and 3) a clear vision of your future (I make no claim as to whether or not this vision is accurate or not). Graduates of top schools are used to getting results when they put their minds to something and tend not to like uncertainty. "
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A similar view, from the point of view of what career counseling offices do, is expressed by Peter Bozzo, writing in the Harvard Crimson: Profits and Bridges
"The more intriguing question is why students—many of whom, like me, were inspired to create during their years at Harvard—eschew careers in the more “creative” professions and pursue work in the financial world. Why are we creating profits instead of bridges?
Of course, recruiting isn't something that can only be done by some kinds of employers.Teach for America is also known for the good job it does: see my recent post on that...
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A similar view, from the point of view of what career counseling offices do, is expressed by Peter Bozzo, writing in the Harvard Crimson: Profits and Bridges
"The more intriguing question is why students—many of whom, like me, were inspired to create during their years at Harvard—eschew careers in the more “creative” professions and pursue work in the financial world. Why are we creating profits instead of bridges?
I think that much of the answer has to do with the resources devoted to career counseling for students whose interests point them toward occupations outside the world of finance and consulting. Certainly some students enter this world because of the financial benefits, but for others it’s simply the most visible and defined career path after graduation. Students can meet with recruiters and interview on campus; the Office of Career Services provides extensive counseling for undergraduates pursuing finance or consulting careers. Many students work in internships during the summer after their junior year; by the end of the summer some have job offers in hand and can go through senior year with defined post-graduation plans while their friends frantically search for job listings and interview opportunities.
"Searching for a career outside finance or consulting often comes with more uncertainty than searching for a career within this profession. As a result, students often need to be counseled extensively when searching for opportunities in non-finance fields. Opportunities for such counseling currently exist at Harvard, but they often aren’t advertised extensively and can be overshadowed by the highly visible recruiters who descend on campus each year. The OCS could more effectively highlight its counseling opportunities for students interested in engineering, politics, or academia and could more aggressively reach out to students interested in these fields. Currently, OCS’s extensive finance career counseling services are not an example of a response to students’ demand for careers in these fields; instead, the supply of these services inflates demand for careers that might not otherwise be as attractive to students.
"As seniors near their thesis deadlines and eventually their graduation dates, thoughts of post-college plans inevitably hang over their heads. Right now, the ease of enter the consulting and finance fields means that students with diverse interests and creative impulses are streamlined into these professions, even if they’re more willing—and more suited—to entering other occupations. So why are we creating profits instead of bridges? It’s not because we’re uncreative; it’s because profits—and the careers associated with them—simply come easier."
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The Occupy Harvard movement seems to agree: Occupy Harvard Rally for Free Speech Targets Goldman Sachs Recruiting Event
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The Occupy Harvard movement seems to agree: Occupy Harvard Rally for Free Speech Targets Goldman Sachs Recruiting Event
Of course, recruiting isn't something that can only be done by some kinds of employers.Teach for America is also known for the good job it does: see my recent post on that...
Teach for America's recruiting at Harvard
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And here's a report by Bryan Caplan on a paper about what hiring looks like (in contrast) at firms whose recruiters look at applications while commuting on the train and in other stolen moments :
How Elite Firms Hire: The Inside Story
How Elite Firms Hire: The Inside Story
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2 comments:
First, Harvard has a limited engineering program. Many of the people, like myself, who went through it had no intention of choosing engineering as a field. (I was going to be a lawyer. I went into finance.) Before asking why Harvard students are not building bridges, one should first ask whether Harvard students can build bridges.
Second, I now teach at a prestigious private college that is not Ivy League and have a number of students who are interesting in Wall Street careers. Few, if any, of these students drift into finance because it's the "easy" career to get into. Far from that, these students need to design their curriculum, outside activities, externships, and internships for that low probability chance that they get a junior internship in the front office of a top-tier investment firm. These investment firms want to see a "commitment to finance" on the part of the students because they will be putting a fair amount of money into training them and don't want their "creative" side taking over after a year or so. I can't tell you the number of financial people who talk about the story of the woman who had over $100K of training put into her who decided to get a masters in photography and walked out the door.
Long story short, at most colleges, getting a job at a top financial firm requires a serious commitment of time, effort, course organization, and dedication to the field. Perhaps the difficulty of it all makes it a bit of a tournament that high-achieving students want to "win", but there's no way that one can make a story that it is low effort or low risk.
I might also suggest that the well defined process extends beyond the recruiting process and into the first year or two of the job. Companies which have large pools of more-or-less fungible people can hire people into that pool 8 or 10 months in advance. A smaller company rarely would know in November that they are going to want a new hire the following summer.
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