Banks try to lure MBA graduates away from Big Tech
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Going to business school enabled Alessandro Scauzillo to achieve his ambition of moving from a job in tech into banking. He is now a product manager in the online trading division of UniCredit Group.
But despite studying at MIP Politecnico di Milano, in the heart of Italy’s banking hub, he was the only member of his cohort of 29 on the full-time MBA programme to join a financial services business after graduation.
“Most people in my class wanted to start businesses,” Mr Scauzillo says.
Investment banking has lost its business school chic. Finance was the most popular career choice for MBA graduates in 2009, by 2016 it had been replaced by consulting jobs and marketing roles in other companies, according to data compiled by the Graduate Management Admission Council.
Amazon, Google and Microsoft have arrived in force on campuses, and now vacuum up the talent at many leading business schools. Big Tech made the largest group of student hires from Mr Scauzillo’s year at MIP.
The biggest recruiter at Duke University’s Fuqua School of Business this year was Amazon. The US school’s top 10 hirers consisted entirely of tech companies and management consultancies.
“Banks still hire people but they have to up their game,” Bill Boulding, dean of Fuqua, 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.”
$125,000 to $140,000
Pay range for product manager roles in tech for Darden graduates
The financial crisis pushed a lot of banks to scale back on MBA recruiting, and in the intervening years consultancies and tech firms have matched Wall Street for pay, according to Jeff McNish, assistant dean of career development in the admissions department of Virginia’s Darden School of Business.
“Last week I had 14 banks on campus here with full interview schedules with students,” he says. “However, my instinct is that there are more students today that see a path into the big tech companies as the reason for doing an MBA.”
The days have gone when banks could persuade students to join them by offering significantly more generous salary packages, Mr McNish adds. “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.
JPMorgan Chase cancelled its European MBA hiring programme in 2013 because it was hiring so few graduates from the handful of schools it worked with, according to Rob Walke, co-head of campus recruiting at the bank.
The bank continues to maintain a presence on US business school campuses because, he says, the culture of moving from MBA into banking is more ingrained there. “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.
JPMorgan has changed its pitch to the MBA students it targets for recruitment, focusing more on the quality of the roles available than the generosity of the remuneration package.
“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,” Mr Walke says.
There is also a stronger emphasis on quality of life, with guarantees to protect weekend leave and holiday time and the opportunity to swap with counterparts based in offices overseas, according to Mr Walke.
Banks have tried to minimise the “culture shock” for MBA students who have been out of the workplace for two years while studying, according to Stéphane Rambosson, chief executive of advisory and executive search firm Vici.
In Europe there has always been a cultural divide in banks between those who have MBAs and those who do not, according to Mr Rambosson.
“Banks are much more focused on doing things than some of the intellectualising you get taught at business school,” he says.
“MBAs produce people who are great for consultancies because they can produce great PowerPoint presentations. Banks are much more deal-focused.”
Christina Decker worked for Google and Accenture before starting her MBA studies at Fuqua last year. A few weeks into the course she secured an internship at the San Francisco offices of Credit Suisse, close to where she grew up.
Ms Decker is excited about moving into banking, but says she is doing so to learn how she can support the many tech companies in Silicon Valley.
“I care a lot about this industry and want to see it succeed,” she says. “These are my hometown companies.”
This article has been amended because Stéphane Rambosson is chief executive of advisory and executive search firm Vici, not managing partner and head of DHR International.