Finance Careers Fall To New Low At Wharton

Wharton Commitment Project

Wharton MBA graduates at 2017 commencement

The numbers of Wharton MBAs going into the financial services industry reached a new record low this year, falling to 32.7% of the graduating class. Only five years ago, the financial sector hired 41.0% of Wharton’s MBAs. The single biggest fall occurred in investment banking and brokerage jobs which took just 12.7% of the class, down from 16.1% a year earlier.

Ever since the Great Recession of 2007-2008, the leading schools that funnel MBAs into Wall Street—Wharton, Columbia, Booth and NYU Stern—have seen fewer and fewer of their graduates headed into the core finance jobs in investment banking, investment managment, private equity, venture capital and hedge funds. When the recession hit in 2008, 47.8% of Wharton’s graduating class went into the financial services sector. The new low at Wharton occurs in a year in which consulting toppled finance as the top industry destination for MBAs at the University’s of Chicago’s Booth School of Business (see Consulting Overtakes Finance At Booth).

The decline of finance as a career option at Wharton was more than made up by the consulting and technology industries which grabbed more of Wharton’s output. Some 28.3% of this year’s crop of Wharton MBAs went into consulting, up from 26.6% a year earlier and just a single percentage point below the 2013 high point. A record 16% of the class landed jobs in the tech sector, up from 12.6% last year.

97.1% OF WHARTON’S GRADS HAD JOB OFFERS THREE MONTHS AFTER GRADUATION

Despite the continued decline of finance at Wharton, a school that built its reputation on Wall Street and the broader financial services industry, MBAs overall saw a 2.8% rise in estimated total median compensation to $152,990, from $148,875 last year (see below). After four years during which Wharton’s median base salary was stuck at $125,000, this year the base jumped to $130,000, and slightly more graduates, 77.2% verus 74.5% last year, reported median sign-on bonuses of $25,000.

Wharton also reported that 8% of its graduates received other guaranteed compensation of $20,500, according to the school’s recently published 2017 employment report. Last year, other median guaranteed comp was $25,000 and reported by 21% of the school’s graduates. The school’s top five employers were McKinsey & Co., Boston Consulting Group, Amazon, Bain and Goldman Sachs. The report is based on a 94.9% response rate, up from 92.5% a year earlier.

All around, it was one of the best years for both pay and employment in Wharton’s history. The school said that 97.1% of its graduates had job offers three months after graduation and that 92.6% had accepted their offers. That’s just a slight decline from last year’s numbers when 98.3% had job offers in that timeframe when 95.5% of the graduates had accepted their offers.

CONSULTING MEDIAN BASE SALARY AT WHARTON THIS YEAR: $147,500

Finance, despite its continued decline as a favored destination by MBAs, was still the number one industry of choise at Wharton, attracting more graduates over consulting by four and one-half percentage points. The highest median base salaries of $150,000, moreover, were in two financial categories: hedge funds and other investments as well as private equity and buyouts. Just 3.7% of the class landed jobs iwth hedge funds, while 8.3% gained jobs at PE and buyout firms.

The consulting industry, on the other hand, has raised the ante in this recruiting season. Wharton reported that the median base salary for MBAs entering the industry hit $147,500 this year, higher than the overall financial services industry starting pay stub. That is below Harvard Business School’s record $150,000 base in consulting this year and just a touch above Kellogg’s $147,000 consulting base. Last year, the median base in consulting at Wharton was $145,000. The highest median base–$180,000–went to MBAs who entered professional services, most likely dual degree graduates with JDs and MBAs who joined top law firms.

After finance, consulting and tech, consumer products was the fourth most popular career choice of Wharton MBAs this year, with 6.3% of the class accepting jobs in that industry. It was followed by healthcare which hired 5.8% of the class and real estate which attracted 3.0% of the grads (see table on following page for industry choices of Whartonites over the years).

MBAS WHO TOOK JOBS OVERSEAS MADE $20,000 LESS A YEAR IN BASE SALARY

Wharton also disclosed that graduates who took jobs outside the U.S. made considerably less than money than the MBAs who landed positions in the U.S. The median base salary for international locations was $115,000, with the lowest salaries–$90,000–reported in Latin America and the highest salaries–$138,000–in Hong Kong. But the overall median was $20K less than the U.S. median of $135,000.

The school did not reveal its highest paid MBA this year, breaking from a long-standing tradition of providing the full range of compensation for MBAs in specific industry categories. Instead, the school followed the lead of Harvard Business School in reporting the 25th and 75th percentile medians. On base pay, the 25th percentile amounted to $122,000, while the 75th percentile was $150,000. For sign-on bonuses, the 25th percentile was $25,000, exactly the same as the actual median for the class, while the 75th percentile was $40,000.

Of the 819 graduates in Wharton’s Class of 2017, 8.1% returned to their pre-MBA employers, 4.8% started their own companies or were already self-employed, while 2.8% postponed their job searches or continued their education.

About The Author

John A. Byrne is the founder and editor-in-chief of C-Change Media, publishers of Poets&Quants and four other higher education websites. He has authored or co-authored more than ten books, including two New York Times bestsellers. John is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, editor-in-chief of Fast Company, and the creator of the first regularly published rankings of business schools. As the co-founder of CentreCourt MBA Festivals, he hopes to meet you at the next MBA event in-person or online.