Despite all the talk of MBAs pulling away from financial sector in favour of glamorous careers in tech start-ups or strategy roles at Google, banking still offers more jobs to those graduating this year than any other industry, as well as an increasing array of career options and some of the biggest pay packets. This doesn't mean MBAs are taking the jobs, however.
MBAs going into financial services in Western Europe and the US received average compensation of $115.6k in 2014, according to new figures from QS Top MBA’s salary and employment report. As generous as this seems, financial services still lags behind a number of other industries – notably, energy, metals and mining, technology and pharmaceuticals. It does, however, lead consulting and professional services, which would are increasingly competing for the same pool of talent.
What’s more, finance jobs are available to MBAs if they want them. The industry offered 22% of all the jobs available to MBAs in 2014, a 5% increase on the 2013 figure – this is the largest share by far, easily eclipsing the 12% offered by consultants and 13% available in IT, even if both industries are growing the number of MBAs they recruit at a faster rate.
Most MBAs going into finance are still hired into M&A positions in the large investment banks, suggests the research, but firms are willing to hire top MBAs for the markets business in sales and trading roles, but this is an increasing rarity.
Instead, investment banks are hiring MBAs into hitherto back water areas of the business – risk, compliance, financial control and technology. These are not divisions traditionally associated with the strategic expertise brought to the table by MBAs, but the greater focus on these areas within the banks is causing them to recruit a higher calibre of candidate.
Outside of the banks, hedge funds and private equity firms are now recruiting MBAs in “significant numbers”, suggests the QS report. This is a significant shift – previously these firms would only have hired MBAs with a decent amount of industry experience, but these days they’re realising the value of bringing in younger business school graduates to “meet growing opportunities”.
All of this is a moot point, however, as finance appears to be losing its appeal. In a separate study released today, the Economist points to how investment banks are falling out of favour, while consulting firms and technology firms are hoovering up more of the best MBAs. This year, just 10% of MBAs went into investment banking, it suggests, down from over 20% in 2007. Over 40% went into the financial sector in 2007, and less than 30% this year. The number of MBAs going into consulting, meanwhile, has increased over the same period and the figure going into technology jobs has more than doubled. However, both industries still recruit fewer graduates than finance, according to analysis of the class of 2013 at Harvard, London Business School, INSEAD, Chicago Booth and Wharton.