Consulting, Banking & Tech: B-Schools With The Most Alumni In Top Firms

Wall Street

Is Wall Street Losing Its Lure?

Investment banking, often seen as a prestigious career path, is losing popularity among young professionals.

The New York Times looked at how the business school data has tracked in recent years for investment banking and how the industry’s high salaries, alone, may not be enough to appease young professionals.

DECLINE TO MBAs HITTING WALL STREET 

Since 2016, B-school data shows that fewer MBA grads are choosing investment banking jobs.

NY Times analyzed data from five top B-schools in the US and found that in 2020, only 7% of graduates from the top five U.S. B-schools went into full-time investment banking roles – a roughly two point decrease from the 9% in 2016.

The University of Pennsylvania’s Wharton School, where more than 20% of its MBAs went into banking a decade ago, only had 12% of MBAs from the Class of 2020 go into full-time investment banking roles.

MONEY OR WORK LIFE BALANCE?

Base salary for a first-year investment banking associate lands around $150,000, with year-end bonuses ranging from $90,000 to $120,000, according to numbers by WallStreetPrep. However, experts say that the pandemic has shifted employee demands. This is especially true for young professionals, who place a greater emphasis on work-life balance and flexibility.

“The industry is not as attractive as it once was,” Rob Dicks, a consultant at Accenture specializing in recruiting in financial services, tells the NY Times. “Employees want a hybrid model, and the banks are saying no.”

When it comes to in-person and remote work, Dicks says banks are hesitant to stray far from the status quo. “The message is: ‘The bank knows best, we have a model for doing this, and you will conform to that model.’”

TECH IS A THREAT

To lure younger bankers, investment banking firms have announced a number of changes ranging from increased salaries for junior bankers to offering $20,000 “lifestyle bonuses.”

Still, many young professionals and future grads simply don’t think the industry’s long hours and tough work are worth it. More and more, the tech industry is seeing an increase in MBA demand. At schools such as the University of Washington’s Foster School of Business, Michigan State University’s Broad College of Business, and UC-Berkeley’s Haas School of Business, more than 30% of each MBA program’s Class of 2020 went into the tech industry. And many tech companies are hungry for MBAs. GMAC’s 2021 Corporate Recruiters Survey highlighted that 96% of tech recruiters plan to hire MBA’s this year, up 16% since 2019.

“The technology sector has just completely changed the game,” Jamie Lee, who left banking and started a venture-capital firm, tells the NY Times. “The opportunity cost is simply too high to be sticking around in a job where you’re not getting the treatment that you want.”

Sources: The New York TimesWallStreetPrep, The New York Times, Bloomberg, P&Q, GMAC

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