Wall Street Impacts Columbia Job Choices

by John A. Byrne on

Wall Street’s continuing decline caused a significant shift in the career choices of Columbia Business School’s Class of 2012, newly released employment statistics show. Columbia MBAs who landed jobs in finance this year fell by nearly nine full percentage points to 41.8% from 50.3% a year earlier. As early as five years ago, finance was taking nearly 56% of the school’s annual MBA graduates.

The percentage of MBAs going into nearly every financial field, from investment banking and brokerage to private equity and hedge funds, declined this year. Citicorp cut its Columbia hires in half to eight in 2012, from 16 a year earlier. Barclays cut even deeper, hiring only three Columbia MBAs this year, down from 11 in 2011 and 15 in 2010. MBA hiring at Columbia by Goldman Sachs, Deutsche Bank, and UBS also was down. The school has attributed a dramatic 19% fall in applications for the class which entered this fall to the decline of Wall Street.

Yet, the school’s overall placement numbers held up surprisingly well despite the shift. Consulting firms more than offset the loss of finance jobs, claiming a record 32.6% of Columbia’s Class of 2012, up from 22.3% a year earlier. Bain, Booz, Boston Consulting Group, Capgemini, Deloitte Consulting and A.T. Kearney all upped their hires at Columbia this year to help ease the transition away from finance. McKinsey & Co. remained the school’s largest single employer, hiring 60 of the school’s 750 graduates, including 27 who had been sponsored by the firm.

SOME 96% OF THE CLASS OF 2012 HAD JOB OFFERS THREE MONTHS AFTER GRADUATION

The result: Columbia says that 96% of its 750 graduates had job offers three months after graduation, just two points down from the 98% who had offers in 2011 at that time. Median base salaries also remained stable at $110,000 to start, while median signing bonuses, received by 69% of the class, rose to $30,000 from $25,000 a year earlier.

Among the very top business schools, Columbia typically releases the the most transparent employment reports and makes previous reports easily accessible, allowing for some interesting comparisons. Harvard, Stanford and Wharton, for example, decline to name their top employers. Columbia, in common with such other schools as Chicago Booth and Northwestern Universtiy’s Kellogg School, publish a list of the top hirers every year, including the number of MBAs taken by each firm. The Columbia list, moreover, goes further, including every employer who hired one or more graduates.

The shift away from finance at Columbia this year occurred after what appeared to be a comeback of sorts for the industry last year. In 2010, only 40.4% of Columbia’s MBAs headed into financial services. Last year, the number rose by ten full percentage points to 50.3% before falling back this year to less than 42%.

THE WALL STREET ROLLER COASTER HAS BEEN IN EFFECT SINCE 2008

Of course, this is nothing new for Regina Resnick, associate dean and managing director of Columbia’s career management center. She was running the office when the finance business completely imploded in 2008. Lehman Brothers, then the school’s third largest employer, hired 21 MBAs in 2008, only to disappear the next recruiting year. Goldman Sachs, which had hired 25 MBAs in 2008, went down to just eight hires in 2009. Goldman hired 15 Columbia MBAs this year.

Still, some 44% of the school’s more than 41,000 alumni work in finance, with only 8% in consulting–a far cry from the 32.6% who chose consulting jobs this year. Despite the macro trends, however, some major financial players managed to increase their Columbia hires, including J.P. Morgan Chase, which brought aboard 15 Columbia MBAs this year, up from nine in 2011, and Morgan Stanley, which employed 11 this year, up from eight a year earlier. For Morgan Stanley, it was the largest number of Columbia hires since 2008 when the firm landed 15 MBAs from the school.

Overall, though, the school long known as the quickest path to Wall Street, saw declining numbers of MBAs in almost every finance field. Investment banking and brokerage took 21% of the class, down from 27.2% a year earlier. Private equity and venture capital, now regarded as the most lucrative of all MBA careers, claimed only 4.3% of the school’s graduates, down from 5.7% in 2011. Hedge funds landed 4.9% of the MBAs, also down from 5.5%. And investment management attracted 6.1% of the class this year, down from 6.7% in 2011. Interestingly enough, some of these categories were actually up at some rival schools. Harvard Business School, for example, reported that 15% of its class this year went into private equity and leveraged buyouts, up from 14% a year earlier.

Resnick, in a statement to Poets&Quants, said the drop “is not as significant…when comparing like numbers. Columbia Business School’s 2012 Employment Report includes sponsored students in the industry and function reports for a full picture of the graduating class. As is noted in the Report, the 2011 Employment Report did not include those students, consistent with numbers reported to MBA Career Services Council for comparative School reports for rankings purposes. If we compare both years excluding sponsored students, the difference is less substantial and does not apply to all financial services sectors. Several factors contribute to employment changes year to year and over time including changes in student interests, an evolving employment landscape, new MBA recruiters and the like.”

HIGHEST STARTING SALARY FOR A COLUMBIA MBA IN 2012: $240,000 IN PRIVATE EQUITY

The school said that the highest paid base salary received by a Class of 2012 grad was $240,000–some $130,000 above the median. The MBA landed that job at a private equity shop. The highest reported signing bonus of the year was $150,000–some $120,000 over the $30,000 median. And the highest reported other guaranteed compensation–not including base salary or sign-on bonus–was $240,000–well above the $50,000 median–for a finance job.

The school’s 2012 employment reports shows that internships are becoming an important source of permanent jobs, a trend that is occurring at other business schools as well. This year, 25% of the class returned to the employer they had worked for during the summer. That’s up from 20.7% in 2011 and only 14.7% in 2010.

As is often the case, there were several top employers in 2011 who went missing in 2012: Nomura, which hired six graduates in 2011 and two this year, General Motors (4), Jefferies & Co. (4), Monitor Group (4), Standard Chartered Bank (4), Bloomingdales (3), Fidelity (3), Lazard (3), Opera Solutions (3).

(See following page for a table of Columbia’s top employers and their MBA hires over the past five years)

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  • mindbullet26

    Is it really because finance companies “cut” their Columbia hires or because more students have multiple offers that include those from Goldman and McKinsey, and choose to go to McKinsey instead? Being a current student at CBS, I’ve seen this a number of times with my peers. Many who have interned at the JPs, GSs of the world interviewed for major consulting companies for full-time because of the 80+ hour weeks they spent over the summer. For management consulting recruiting, the biggest competition is often finance companies in search for talent, and right now consulting companies look much more appealing with higher base salaries, better work/life balance, and the VERY aggressive recruiting efforts on campus.

  • http://www.facebook.com/marry.david.338 Marry David

    MBA is a good career bulding task

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