A decade ago, finance was the most popular career choice for MBA graduates. That was before the 2008 finance collapse produced pink slips and panic. As MBAs were carrying their belongings out of Lehman Brothers, the tech industry eclipsed banking as the seat of power in business. Now, consulting has replaced banking as the most popular career choice for MBAs according to the Graduate Management Admission Council. And high tech is closing in fast.
Jonathan Moules, a writer at Financial Times, discusses this pivot towards tech in a new article.
More MBA Grads Are Going Into Big Tech
Companies, like Amazon, Google, and Microsoft, are increasingly pitching tech careers to MBAs at leading business schools. At Duke University’s Fuqua School of Business, Amazon was the biggest recruiter of students.
Last year, Poets & Quants analyzed data from TransparentCareer, the Glassdoor for MBA grads, and aggregated a ranking of employers based on self-reported data from MBA grads. The data was divided into three key categories: total compensation, weekly hours worked, and job satisfaction. MBA grads reported Google as the most desirable company to work at. Tech and consulting companies dominated within the top 10. In fact, no banks appeared in the top 10 – and just Goldman Sachs and Morgan Stanley made the top 20.
Bill Boulding is the dean of Duke’s Fuqua School of Business. He tells Financial Times that banks will need to change their traditional recruiting pitch of generous salaries to compete with big tech as the top employer for MBAs.
“Banks still hire people but they have to up their game,” he says. “If you are going to attract the current generation of students you have to give them something that has meaning and purpose, not just the opportunity to make a lot of money.”
Salary Is Now Just As Important As Quality Of Life
One reason behind why tech has become so popular among MBA grads involves pay. Banks can no longer simply win over MBA grads with generous salaries.
Jeff McNish is the assistant dean of career development in the admissions department of Virginia’s Darden School of Business. McNish tells Financial Times that since the financial crisis, a number of tech firms have matched Wall Street for pay.
“At Darden, whether it is a consulting job, an investment banking job or a product management job in a tech company, the pay is going to be the same, in the $125,000 to $140,000 range,” he says.
Rob Walke is co-head of campus recruiting JPMorgan Chase. Walke tells Financial Times that the bank still actively recruits among US business schools, but the landscape and demand for banking careers has changed.
“You will always have those people who knew from birth that they wanted to go into corporate finance, but gone are the days when we would be inundated with students who want to go into banking,” he says.
Walke says that JPMorgan has changed its recruiting pitch to focus more on the quality of banking roles rather than simply offering generous salary packages.
“If we are spending a lot of time and money to hire these highly talented individuals, we want to make sure that when we get them there is something interesting and challenging for them to do,” Walke tells Financial Times.
Big Tech Is Actively Recruiting For MBA Talent
In the data collected from TransparentCareer, Amazon took the number one spot for hiring more MBAs than any other company.
Companies like Google are actively making their presence known among MBA campuses. And they want top MBA talent.
Kevin Marvinac is co-founder and chief operating officer of TransparentCareer. He says tech companies, like Google, have a number of MBA roles available.
“In particular, they hire MBAs with technical backgrounds for product manager roles that seem to be in demand,” he says.
Marvinac adds that the continuing decrease in popularity of financial services roles is a “sign of the times.” Most current MBAs, he explains, were studying in undergrad during or right after the financial crisis. “I remember being a finance major in college and thinking, ‘Wow, I have no interest in banking anymore after watching the Lehman Brothers debacle.”
If anything, it seems now that banks will need to compete with big tech for future MBA talent.
“Investment banking isn’t the most desirable post-MBA career anymore, and it may not even be in the top three,” Marvinac says. “That’s something these recruiters are going to have to fight against.”