Women Choosing Tech Over Investment Banking
What do women want?
If you ask female MBAs, the answer probably isn’t investment banking.
Indeed, investment banking has been losing its luster among MBAs since the financial collapse. Hiring is down for starters. Millennials – seeking greater balance and meaning – are increasingly turning their back on banking, despite a healthy uptick in compensation base and bonus since 2010. Plus, banking no longer stirs the American spirit, where homesteads on the frontier have given way to public offerings of companies launched from basements.
Traditionally, women have been excluded by Wall Street (at least in the c-suite). According to a new article from CNN, female MBAs – like their male counterparts – are increasingly turning to the technology industry.
That includes Heather Tatroff, a 2011 Booth grad, who recently left JPMorgan to serve as Chief of Staff at Chegg, a Bay Area firm that rents textbooks online. “The ability to get promoted and take on more responsibility is much more prevalent in a tech company than at an investment bank,” Tatroff tells CNN.
However, faster career progression is only one variable driving women to tech. Pay – traditionally banking’s biggest advantage – has taken a hit (at least in the eyes of women). According to Universum USA, a career research firm, female MBA students believe they will earn an average of $98,000. Compare that to investment banking, where these women expected to earn $87,000 (excluding stock and bonuses) to start. However, this may also be a self-fulfilling prophecy. According to research presented at an MBA Career Coaches Investment Banking Career Primer, the average MBA graduate entering investment banking makes $134,900 to start. At the Wharton School, for example, 2014 graduates entering investment banking earned $100,000 to start, along with a median sign-on of $40,000. At Columbia Business School, 2014 grads earned a median $50,000 bonus to go along with their $100,000 starting pay. In other words, women’s perceptions don’t necessarily align with reality.
Tech’s work-life balance is another appeal. In the same Universum study, women anticipated working more in banking by a 51-to-48 hour margin. Tech firms such as Microsoft, Netflix and Adobe, are also rolling out more friendly parental leave policies. While investment banks are relaxing requirements, such as Goldman Sachs instructing employees to take Saturdays off, such messages aren’t reaching women.
And one reason may be the entrenched view of investment bank as a boy’s club where men write the rules. “The macho, testosterone-fueled reputation of Wall street jobs was particularly off-putting to women,” says Michael Bidwell, a Wharton professor, in an interview with CNN. “These identification issues, much more than work-life balance, seemed to explain why women didn’t go into Wall Street.” Tabitha Salomon, a 2014 Harvard Business School graduate who is currently a global strategist at Samsung, seconded Bidwell’s point. “Banking itself — the rough hours, the chauvinistic impression people have of the culture — nothing is attractive about banking except for the pay.”
Indeed, tech has become bigger and more popular among MBAs. At Wharton, for example, students who enter the tech sector have grown from 6% to 14% in the past five years. What’s more, investment banking is attracting fewer graduates. For example, the percentage of Columbia MBAs entering the investment banking has plunged from 43.7% to 16% since 2001. In the past five years, that percentage has been cut in half – from 10% to 5% — among Harvard Business School grads. In other words, women are simply part of that trend (if not ahead of the curve).
“Women are getting the confidence that they can be successful in technology jobs,” says Jun Li, an assistant professor at the University of Michigan’s Ross School of Business, to CNN. “The technology industry always offered better work-life balance, but it wasn’t always as competitive with pay compared to finance jobs [as it is now].”
DON’T MISS: GOOGLE STILL MOST POPULAR EMPLOYER FOR MBAs
Comments or questions about this article? Email us.