Investment banks have no problems attracting enough candidates for their graduate jobs. For every available position last year there were 135 applications and even when some firms released new front office role outside of their usual recruiting season in March this year, they were easily over-subscribed. But what about their ongoing appeal to students?
On Wall Street the trend is one of recovery for the investment banking ‘brand’. Students, particularly those studying business-related topics, view banking more favourably after the 2008 financial crisis hit the sector’s appeal. JPMorgan and Goldman Sachs both made it into the top 10 of the latest desirable employer rankings by research firm Universum and while European firms were low down the list, their standings were still higher than in 2013.
In Europe, though, banks have a problem. Google, Microsoft and the professional services and consulting firms all dominate the top ten, with only Goldman Sachs and JPMorgan making gains in the last year to rank a not-overly-impressive 14th and 17th respectively.
Deutsche Bank, last year’s top-ranked bank, has fallen by five places, UBS and Bank of America Merrill Lynch, which came in 38th and 43rd in 2013, have now dropped out of the top 50 entirely in Europe.
Lest we forget, Deutsche has been at the centre of a series of rate-rigging scandals and its co-head of investment banking Colin Fan warned its employees of “vulgar behaviour” that could damage the bank’s reputation only this month. Meanwhile, Bank of America Merrill Lynch hit the headlines last year when an investment banking intern, Moritz Erhardt, died after working consecutive all-nighters. Not exactly the sort of thing to ingratiate the firm with potential graduate employees.
In theory, this isn’t too much of a problem for the banks – after all, their main recruitment route comes through their summer intern pool and most candidates are competitive, driven and know exactly what they’re getting into.
Except there are a couple of issues to consider. Firstly, investment banking recruiters regularly tell us that they don’t just want to hire typical candidates; namely, finance and economics students from top universities, but they also want to recruit top graduates studying liberal arts subjects who perhaps would never have considered a career in finance.
Then there’s the fact that investment banks continue to struggle to hire for technology and operations positions – and they are competing against firms like Google and Microsoft for these roles. If students are viewing banks less favourably, this is cause for concern.