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Junior bankers to get junked?

They’re cheap, but trainees on ‘rotation’ are engaged in a game of musical chairs. And that’s not a great situation to be in right now.

Back in November 2006, students at universities and business schools had reason to feel lucky. Yes, there were 60 analyst applicants for every place (according to High Fliers Research), but banks were busily hiring for record analyst and associate intakes for the following year.

Fast forward two years, and the fortunate applicants who got junior banking jobs in 2007 don’t look so lucky after all. Business has taken a turn for the worse, and with the likes of Bank of America, Morgan Stanley, Deutsche and HSBC operating rotation programmes in which trainees bounce between desks for anything from three to 12 months at a time, plenty of last year’s entrants are still without fixed positions.

Horrid things may already be happening to the itinerants. Lehman is laying off 5% of its workforce this week, according to CNBC (although this isn’t specific to juniors). And last week, US blog site Dealbreaker ran a story claiming Credit Suisse had told first years in its US financial sponsor group to shift into back-office roles outside the US or find new jobs elsewhere.

Although London recruiters deny they’re being hit with a flood of junior CVs, an associate at one US house in Canary Wharf says recent entrants are on shaky ground: “If you’re just out of university you’re more vulnerable to losing your job. You don’t have the relationships or the business acumen and are a waste of 80k.”

Jonathan Knee, senior managing director at Evercore Partners, a former banker at Goldman and Morgan Stanley, and author of the book The Accidental Investment Banker, says rotation programmes are always difficult to navigate, but that this year they may become impossible.

“An already stressful situation is likely to become a lot more stressful – a number of people won’t find any position when rotations end. And many others will end up in a highly inconvenient but more profitable geography, or in an entirely different sector to the one they’d intended.”

Are you an analyst or associate on rotation? Let us know if you’ve been offered/obliged to accept any unappealing positions. Or do you have any advice on how to ensure you get a good spot when the music stops?

Comments (10)

  1. Harsh, but this is the market in action. I similarly suffered near the end of my rotational programme, but kept my head and pulled through.

    Nature red in tooth and claw…….

  2. I’ve just been through this mess so here’s the 2020 hindsight:

    1. Stay constantly aware of what you’re getting into – there is a lot of risk in this business and as an analyst/associate you probably dont see it. You get paid a lot more than your consulting pals not because you’re way smarter – these firms are riskier and they have a higher “borrowing” cost.

    2. Stay in touch with headhunters from DAY ONE – these chaps will be calling your bosses and its likely that you’re the flunkie on the desk picking up calls – discretely make note of their names and numbers especially when you’re taking these down to get others on the desk to call back.

    3. Its okay to stay on the lookout even if you love your job/boss/desk: This is the nature of your job – believe it or not your boss is looking out as well. There is no guilt. Keep telling yourself you’re an ethical mercenary and nothing more.

    4. Keep your eyes and ears open for internal opportunities – there are a lucky few banks that have internal opportunities extensively advertised – most dont – stay constantly aware of who’s quitting what part of the bank – what are other grads on other desks doing and network extensively.

  3. Or do a law conversion and get a proper career! Not worth the stress of losing your job to crunch numbers all day anyway!

  4. Just finished an 18 month rotation at big bang. Thought it’d be good to get varied experience so moved through several sites, business units and countries. Realise now this was a mistake, now have 3 sets of shallow, unrelated experience and a mixed up looking CV, plus 18 hard months of being the new kid. My advice, take it or leave it, is stick with the same thread through your placements. Build a depth of experience that’ll stand up to scrutiny at interview. Those who did were in their perm roles before the grad programme ended, those who didn’t took pay/grade cuts or took the wrong job just to keep a foot in the door.

    Another thing-don’t put all your eggs in one basket. You might have been told unofficially the job’s in the bag, but that person might not know if something bigger is going on further up the hierarchy. Beware, positions and people get cut! If you rely on just one you could find yourself back at square one come the end of your programme. Hedge your bets!

  5. Strongly agree with “Anonymous, Sales & Marketing, Tue 11 Mar 08”. I did three rotations at the start of my career as well – through lack of direction – and it definitely created some catching up to do! Easy to say with hindsight, obviously, when the whole point was I didn’t know what to do, but I should definitely have pushed harder to get the “quality” placements.

    Am very glad that’s a few years behind me know… good luck to those floundering around for a permanent placement.

  6. A good batch of us are on our last rotations with HSBC Bank in one of their global graduate rotational schemes. The silence from Human Resources in Canary Wharf is ominous at best.

    Last Rotation: HSBC Reply
  7. I’m not even at a top tier and I am hearing the same threat. HR makes me feel there is nothing at the end of the rainbow and now I think I have a few weeks left till I get the boot!

    On the Rebound Reply
  8. There is always a place for a good graduate but the bottom quarter should get kicked out.

  9. Totally agree with “Analyst, Investment Banking / M & A”. At least bottom 10% should be let go. It creates healthy competition in the workplace.

  10. Lehman fired us in 2002 just 3 weeks after we joined out of the MBA program. Sign-up bonus turned out to be a forgivable loan (hence they clawed it back). I will remember this awful experience all my life. Advice to all you juniors, stay away from them. Despite all the acclaim they get Lehman is only good for their shareholders not the employees. Beware!!!

    Lamed by Lehman Reply

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