Want a job on Wall Street? You may need to start preparing as a college freshman, according to Bloomberg. First-year investment banking analysts can earn over $180,000, fueling fierce competition. Internship acceptance rates at Goldman Sachs and JPMorgan have fallen below 1%. How are aspiring bankers getting an edge? Students are joining finance clubs, learning accounting and valuation, and networking with bankers before applications open. Some are turning to private coaches, with services costing up to $50,000. An executive coach on LinkedIn summed it up: “The slog is real.”
This Bloomberg Businessweek piece on the investment banking recruiting arms race highlights a dangerous premise, and one that I've always tried hard to push back on in my time in the early careers space: strong talent is rare, and if you don't lock it up early, you'll be stuck with what's left. This idea is wrong.
First, it's forcing young people to make career-defining decisions before they've had a real chance to figure out what they actually want.
More harmful is that this strategy shrinks the talent pool to the point of being exclusionary. The students who "win" aren't necessarily the most talented, but they are the ones who already knew by sophomore fall (if not earlier!) about investment banking and understood the clock. If you didn't grow up with a parent or a family friend in finance to provide you with that exposure, you might not find your way to this industry until it is already too late to compete. We are rewarding proximity to finance, not the aptitude for it.
When I started recruiting in 2003, we didn't extend summer internship offers until February of that same year. Running the process that late had its challenges, but nobody has ever shown me evidence that the juniors we hired in February 2004 were weaker than the sophomores who will get offers this December for a 2028 summer internship.
There are 11 million college undergrads in the US - that's a lot of strong talent to chose from. Wouldn't it be daring for a bank to push back on the notion that early talent is better talent? What if a bank decided they were going to wait for the candidates who entered college with a lot of ambition and raw talent, but maybe not the social capital to understand every career possibility? A bank that does that opens up a huge new talent pool, one that is often ignored, and could save themselves the pain of competing with every other institution for the same 100 candidates - a win win for their recruiting efforts as well as the talented students who would be otherwise overlooked.