The new reality of becoming a junior investment banker
Investment banks are having to work harder than ever to attract top university students on to their graduate schemes, but are often disappointed with the skills they bring to the table.
Banks want their junior recruits to be digitally savvy enough to drive change across the sector, clued up on the increasing barrage of regulations and, ultimately, well-rounded individuals who can adapt to the shifting financial services environment. Perhaps not surprisingly, a number of the new recruits are found wanting in some of these areas, according to a panel of senior bankers and fund managers speaking at an HEC Paris panel in London last night.
Investment banks have, of course, been focusing more on the recruitment of juniors, with a number of firms increasing analyst salaries by up to 20% and reducing working hours in an attempt to sway talented graduates away from start-ups, consultancies and the tech sector. However, interest among graduates in banking has waned.
“The number of CVs we receive for graduates and internship roles has decreased massively since the financial crisis, as banking became a less trendy career path for graduates,” said Mattieu Wiltz, managing director, sales and marketing country head for France, Belgium, Netherlands and Luxembourg at JPMorgan. “We’re working harder than ever to attract graduates, spending more time on campus to really communicate how the industry is changing and why it’s still an exciting career.”
How junior bankers are changing
However, the types of graduates that banks want to recruit is changing, suggested the panellists. Investment banks are investing more and more into training their staff on the technical elements of the various job functions, and instead want their graduates to be armed with softer skills.
“There are too many graduates coming through with very narrow skill-sets and what we need are multi-disciplinary individuals, able to integrate the bank’s values, change technology and understand the more complex regulatory environment,” said Jean-Eric Pacini, managing director, head of equity distribution for EMEA at BNP Paribas. “Technical skills are all very well, but we expect more from students. Increasingly, with so much change in the industry, it’s more about big picture judgement than a narrow band of skills.”
The ability to broaden your skill-sets and adapt to a wide range of potential roles, will ultimately benefit your investment banking career, suggested panellists. Being a master of one, very technical element of banking will stunt it. “When I first started out at 21 or 22, I was doing the same job as someone in their 40s,” said Ole Rollag, managing principal of Murano Connect. “Either I was very high potential, or the job this person was doing was a little depressing.”
More to the point, however, is that investment banking career paths are no longer linear, suggested Pacini. Getting to the senior management ranks is no longer about individual performance, but is more centred on a broad range of experience.
“Linear careers are over. You’re not going to start out as a junior salesman, move up to head of sales and then be considered for senior management,” he said. “You need to move laterally – say, start out in sales, move into structuring, get some experience in IT, then risk or compliance and then you might be considered for management.”
The special ones
Investment banks have long preached that junior bankers are the future leaders of the organisation, but the reality of day-to-day jobs, particularly in M&A, has been punishingly long hours, a high fall-out rate among analysts and a general attitude that junior bankers are highly-paid, replaceable drones.
There are signs that this attitude is changing. Spurred into action by the death of Bank of America intern Moritz Erhardt last summer, investment banks have been implementing mandatory weekend days off and recruiting more juniors to alleviate workloads. Jefferies CEO Richard Handler has just sent a memo to mid-ranking and senior employees telling them to take a genuine interest in its new 20-something recruits, getting to know them personally and implementing a ‘no jerk’ rule.
“Waiting until the last minute to hand out work, creating unnecessary projects or deadlines, or just being insensitive makes you a jerk,” he said. “We do not have or want jerks at Jefferies.”
This might seem like pandering to Generation Y, who don’t want their entire lives consumed by their jobs, but it’s something that’s starting to sink in, insisted Wiltz.
“With the new generation we have to make more comprises with juniors’ personal lives and create a better work-life balance. Increasingly, graduates want to work for a company that’s not going to consistently screw up your plans outside of work. It’s a big change, but they are good changes,” he said.