Source: Financial Times
by Laura Noonan in London and Ben McLannahan in New York
Nov 11, 2015
Graduates from the world’s top 10 business schools are 40 per cent less likely to choose a career in banking than they were before the multibillion-dollar losses, trading scandals and shrinking pay packets of the last few years.
An analysis by the Financial Times of the career paths of graduates from the top 10 MBA programmes in the world shows just 10.6 per cent are now choosing banking as a career compared with 17.4 per cent in 2008.
The 6.8 percentage point drop translates into a 40 per cent difference in banking’s popularity before and after the financial crisis.
Wall Street’s biggest banks, including Goldman Sachs and JPMorgan, have been displaced by tech companies such as Amazon and Google as graduates shun the insecurity and long hours of finance in favour of more entrepreneurial professions such as technology, or more reliable employers like the consultancy McKinsey.
The shift in sentiment stands in contrast to the boom years leading up to the financial crisis when Wall Street and the City of London dominated the MBA recruiting process, attracting the brightest with lucrative pay packages.
The biggest decline is at Harvard Business School, where the popularity of investment banking has fallen by more half among its 690 job-seeking graduates.
“Banks are now much less appealing, especially in Europe,” says Alan Johnson, managing director at Johnson Associates, a Wall Street pay consultant.
He adds: “The pay, the rules, the oversight, the politics, the bureaucracy — firms are not nearly as attractive as they used to be.”
The steep fall in the popularity of investment banking as a profession has also outstripped that of the overall financial sector, which includes insurance, fund management and consultancy, whose appeal has reduced by 23 per cent.
Banking’s falling star among the world’s business elite — who often pay tens of thousands for their MBAs and face rigorous selection criteria — comes amid a gloomy prognosis for bankers, particularly in Europe. The continent’s banks now employ almost 370,000 fewer people than they did at the end of 2008, data collated by the European Central Bank reveals.
The reduction is more than 11 per cent of the total number employed by EU banks in Europe and doesn’t include the massive cuts made by Swiss banks UBS and Credit Suisse. It is also flattered by he addition of Croatia to the EU, which added about 22,000 bank workers to the area.
However, Ros Stephenson, head of Americas at UBS and one of the most senior women in investment banking, said she would not hesitate to advise her four children and their peers to enter banking should they so choose.
“There is definitely lots of work in the early years,” she says, “but finance isn’t the only industry where the hours can be demanding and unpredictable. We do our best to monitor work integration and drive an intellectually stimulating and team oriented environment. It’s still a great job.”
