Banks are finding it harder to attract young recruits & volunteering helps
Millennials are getting pickier
“FIST BUMP, MAN.” That was how a young employee at Bank of America Merrill Lynch expressed his approval after a presentation to staff, recalls Diego De Giorgi, head of investment banking there. The boss obliged. After a recent “town hall” meeting he got an e-mail from a second-year analyst who wanted to discuss some ideas. Mr De Giorgi duly invited him and a few of his peers for a chat.
Today’s recruits to big banks have different priorities from the newcomers of a decade or two ago. These days a presentation to university students might be followed by half an hour of questions about the bank’s corporate social responsibility programme, as well as the more obvious ones about pay and promotion prospects.
“ Millennials are much more likely to come and go than to pursue a one-firm career ”
Those presentations attract significantly fewer people than they did at the height of the banking boom. An event at a top American business school before the bust, says a bank boss, would need an overflow room. Now, he jokes, bank staff outnumber potential recruits.
In fact, finance, along with consulting, remains the top destination for graduates of America’s leading business schools (see chart). But it is a lot less popular than it was; at MIT’s Sloan School, for example, it shrank from 31% of the total in 2006 to 15% last year, and at Columbia from 55% to 37%. Conversely, technology has leapt from 12% to 33% at Stanford and doubled its share at other schools. Within finance, investment banks are still the biggest recruiters, but hedge funds, venture capital and private equity have gained ground.
Banks also need fewer people in absolute terms. Trading operations have been cut back, and a difficult decade has increased pressure to cut costs. Some bankers say that recruiting ambitious youngsters is not that hard; banks still pay well, and plenty still want to join. Keeping them is a different matter. After two or three years some itch to try their hand at tech, private-equity firms or hedge funds. “Millennials are much more likely to come and go than to pursue a one-firm career,” notes the chief executive of an international bank.
“There was a view that this was cyclical,” says Ray McGuire, global head of corporate and investment banking at Citigroup. “I think it’s more secular.” So his bank and others are trying to make themselves more attractive to 20-somethings. At Citi, for instance, new investment-banking analysts can defer starting their jobs for a year to work at a non-profit organisation at 60% of their proposed pay. Back in the office, too, banks promise less spreadsheet drudgery, as well as faster promotion for outstanding performers. The Wall Street convention, says Mr McGuire, was to advance people “almost in lockstep”; now they are more likely to move up “when they are ready”.
Fashions in the job market are fickle; tech also attracted lots of graduates during the dotcom bubble before falling back, and could lose its shine once more. But for now banks will have to scramble to get and keep the brightest and best.
This article appeared in the Special report section of the print edition under the headline "The millennial problem"
Source: The Economist