Harvard & Wall St.: A Love Affair Ended

Harvard Business School students cheer during their graduation ceremonies in Boston

Harvard Business School students cheer during their graduation ceremonies in Boston

Only five short years ago, Wall Street proved amazingly alluring to Harvard Business School grads. Just before the collapse of such venerable Wall Street names as Bear Stearns and Lehman Brothers, the financial sector hired a whopping 45% of all the MBAs Harvard could produce.

But with the implosion of the economy in 2008 came massive layoffs, deep cuts in hiring, and a restructuring of the financial sector that has made many of those MBA jobs far less appealing than they once were.

This year, only 27% of Harvard’s Class of 2013 ventured into financial services, the lowest percentage of grads in memory, according to a recently released preliminary employment report. Only last year, the industry took 35% of Harvard’s MBAs, and in 2011 some 39% of the class was absorbed by financial services.


It’s as if Harvard Business School has walked away from Wall Street. Some of the biggest declines have occurred in investment banking and investment management as well as private equity and leveraged buyouts, the latter of which paid the highest starting salaries this year. Only 5% of Harvard’s Class of 2013 went into investment banking, down from 10% in 2011. Only 5% landed jobs with investment management firms, down from 12% in 2011. And this year, 9% of Harvard’s MBAs went into PE and LBO firms, down from 15% last year. Venture capital, which took 4% of the graduating MBAs from Harvard back in 2008, is now down to hiring just 1% of the class.

Though Harvard does not reveal the exact numbers of MBAs that are being hired by specific companies, the latest employment data from Duke University’s Fuqua School of Business shows a fairly significant curtailment in MBA hiring by several major financial firms. Goldman Sachs hired only three Duke MBAs this year, down from six last year; Credit Suisse employed just two MBAs from Duke, down from six last year, while Morgan Stanley took only one grad, down from three in 2012. Barclays Capital landed two Fuqua grads this year, versus. six in 2011, while JP Morgan Chase brought aboard two, versus five in 2011. Bank of America/Merrill Lynch hired five Duke MBAs this year, down from 11 in 2010.


Interestingly enough, not all of the decline at Harvard Business School can be attributed to Wall Street’s troubles. Two years ago, the school made a significant, though unannounced, change in its admissions policies. Admits from private equity and venture capital fell to 13% from 18% a year earlier, while those from the investment banking and investment management fields dropped to 12% from 14%. All told, there was a decline of seven percentage points in finance types, year over year (see Harvard Down On Finance Types). Some admission consultants said at the time that applicants from prestige private equity firms who would have ordinarily been accepted to Harvard were being turned down.

What goes into Harvard tends to correlate into what comes out. So those admission changes are now being reflected in the record low number of 2013 graduates who have gone into the financial sector–and the $5,000 decline in the median starting salaries of Harvard grads. A drop of seven full percentage points in incoming students with financial industry experience seems directly related to a drop of eight full percentage points in outgoing graduates going into finance. The upshot: The $5,000 drop in the median salaries of the Class of 2013 was pretty much the result of admission decisions made two years ago by Dee Leopold, Harvard’s managing director of admissions and financial aid.

“It could be something in the Charles River or even Walden Pond water, but her Majesty Ms. Leopold seems to have a good sense of the near future, which is a more rare quality than you might think,” quips Sandy Kreisberg, an admissions consultant with HBSGuru.com

Wall Street’s Meltdown Is Still Playing Out At Harvard Business School

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Out Of Finance & Into Consulting, Technology & Consumer Products

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(See following page for how much this year’s Harvard MBAs are making in different jobs)

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