Bye Bye Banking: Appeal Of Wall Street Falls Among MBAs

Over the past several years there has been a migration to management consulting firms and more recently entrepreneurial technology businesses such as Amazon and Google, which are known to offer a better work-life balance, broader responsibility, generous pay and stock options. “The skills [MBAs] learn can be successfully used across a range of employment positions in the current economy,” said Scott Rostan, founder and CEO of TTS. 

The eighth annual TTS MBA Employment Survey found that other employment options were preferred at record levels, including consulting firms (20% of respondents and up 3% from last year), corporate development at a Fortune 2000 company (13% overall, up 5%) and boutique banks (12%, up 5% from last year). Positions at startups were only the top preference for 5% of MBAs, a 2% drop from a year ago.

Large banks also decreased their recruiting efforts this year, according to TTS. When asked which firms have been actively recruiting, 43% of MBAs responded they were approached by banks, a 6% drop from 2016. 

At Harvard Business School the number of MBAs working at investment banks has fallen from 13% in 2007 to 5% last year. Meanwhile, the number going into tech reached 20% in 2016, up from 7% in 2007. 

“Banks are still a dominant hiring force for MBAs and continue to attract top talent, but working for larger established companies off of Wall Street is becoming more attractive to MBAs, as they offer a different type of lifestyle,” said Rostan. 

MBAs resent the long working hours typically associated with investment banks, according to business school careers departments, and many millennials are placing work-life balance above financial rewards in their careers. The negative perception of working hours was heightened when a Bank of America intern died in 2013 after working for 72 hours straight.

Banks have made efforts to improve work-life balance. Credit Suisse is encouraging European employees to take Friday night and Saturday morning off. UBS told bankers to set aside two hours a week for “personal business”, and JPMorgan has relaxed its dress code to “business casual”.

While banks are less appealing to MBAs, many still flock to them. Goldman alone received 250,000 applications – 30,500 from MBAs – for summer jobs last year. Top banks typically hire just 2-3% of candidates.   

Investment banks still offer good career prospects for MBAs, with salaries there among the highest of all sectors. At Stanford Graduate School of Business, last year MBAs made US$150,000 mean average salaries at investment banks, higher than salaries in both the consulting and the technology industries.