If you’re an MBA in the UK looking for a job in investment banking, London Business School is the place to study. Investment banks provide scholarships to the school, swarm around campus courting the students and generally offer the opportunity for summer work experience.
It’s therefore an indication of the tough job market, or MBAs’ appetite for moving into the industry, that finance firms in general – and investment banks in particular – are employing fewer graduates from the school. According to LBS’s 2013 Employment Report, published this week, 28% of this year’s class took a job in the financial sector, compared to 32% in 2012.
This isn’t a significant drop, but two things are noteworthy. Firstly, the proportion of students going into finance who secured a job in investment banks has dropped – from 17% last year, to 12% in 2013, while fund management and private equity have become more popular destinations. What’s more, the major investment banking employers are hiring fewer MBAs.
Citi was the biggest employer of LBS MBAs for the second year running, taking on eight people this year compared to 12 in 2012. Deutsche Bank, meanwhile, recruited 11 MBAs from LBS last year, and just three in 2013, while Goldman Sachs took on two people this year, compared to seven in 2012. Credit Suisse and JPMorgan both increased their intakes, but only by one person each on the previous year.
Student numbers at LBS have remained consistent at approximately 400, 96% of which received a full-time job offer within three months of graduation.
The shift has been towards the corporate sector, with large tech firms like Amazon and Google both proving more attractive to the class of 2013 at LBS.
The chart below on sector choice for LBS’s MBAs shows a continuing contraction in the proportion of people entering the financial sector since 2010. This trend looks set to continue, based on the summer work experience preferences of the class of 2014.
Google and Amazon, along with consulting firms Bain and McKinsey, took in more than twice the number of MBAs for summer internships this year than in 2012 – between 14 and 16 people each. Citi, Credit Suisse and Goldman were the top finance recruiters with seven students apiece. Last year, Credit Suisse took on 15 students for summer internships, while JPMorgan and Citi each recruited eight students.
Finance firms are also paying less – average weekly compensation for summer interns was £1,045 this year, compared to £1,138 in 2012.
The decline in interest or recruitment of MBAs by finance firms comes as no surprise. As we've noted previously, MBAs are now having to work harder to secure internships in banks, often the fastest way to a full-time offer, or are being increasingly creative in their job search techniques. Globally, however, the largest proportion of MBAs are still coming from the finance sector and are taking the qualification to "further their place in the industry", according to a November report from QS.
For those signing up to a full-time role in the financial sector, average total compensation (including sign-on and year-end bonus) was £135.7k last year and £127.1k for the class of 2013.
This year, 30% of LBS’s MBAs were working in finance before studying. 46% those going into finance worked in the industry beforehand, 35% were from the corporate sector and 19% from consulting. Finance was the industry least likely to be transitioned into upon graduation.