Why an MBA won't get you the banking job you want. And what you can do about this
Do you aspire to a job in an investment bank in order to recoup the tens of thousands you’ve spent on your MBA? Before you hit “submit” on your application, here are a few things you should bear in mind about looking for a job in investment banking in Europe with an MBA.
Before the financial crisis, investment banks were some of the biggest recruiters of MBAs. I was one of the people recruiting MBAs on their behalf. In 2008, Lehman Brothers was one of the top 5 hirers of MBAs globally. Merrill Lynch, where I’d also worked, was one of the top employers too.
Eight years on, and banks have fallen away. Instead, the consulting firms are the biggest recruiters of MBAs from top schools. For example, London Business School's most recent MBA employment report, for 2014, shows that the biggest hirers of its MBAs were McKinsey & Co, the Boston Consulting Group, Bain & Co and A.T. Kearney. Collectively, these firms hired 71 students. By comparison, the biggest banking hirers (Citi, Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley and Nomura) hired just 25 people.
Banks generally hire MBAs into a far narrower range of roles than previously. Ten years ago, banks often hired MBA associates into IBD (M&A and corporate finance) sales and trading, equity research, private banking and wealth management. Now, most MBAs are hired into IBD. A few are hired into wealth management and commercial banking roles, but not many. Trading floors tend to focus on students from financial masters programmes and undergrads.
Although banks are looking for relatively small numbers of MBAs, you don't necessarily need to have worked in banking prior to the MBA. However, banks behave as most employers would in these situations – they focus generally on candidates with excellent academics and pre-MBA work experience – highly analytical roles at blue-chip employers are often valued.
If you think you have a strong academic and professional background, there are a number of areas you should focus on to maximise your chances of success when you apply:-
1. It can be very helpful to demonstrate some understanding of financial modelling. Many schools offer access to online modeling classes to provide deeper practical experience over and above the teaching delivered in MBA courses and electives. For this reason, if you aspire to work in banking after the course is over, you really need to attend some extra-curricular or online modelling classes while you're studying.
2. You need to know about the firm and the deals they’ve been doing – and be able to discuss market reaction to the aspects of the firm’s recent transactions. This isn’t particularly difficult – it just needs a few hours of research. It’s also helpful to understand industry trends, so regular review of the financial press is essential for at least six months before you start applying to ensure you are in tune with what’s going on.
3. The tricky part is articulating your story so you can describe why you want to join a particular firm and what makes it different from its competitors. This is often the hardest question to answer – until you work at an employer it’s very hard to figure out what it’s like from the outside! Ask recent alumni to share their experiences and insights – then you can answer along the lines of “from my own interactions with staff of xyz bank and speaking with alumni of my School, xyz bank appeals to me because…”
Other departments of large banks may hire MBAs on a case-by-case basis – but will do so as part of experienced-hire recruiting. Inevitably your pre-MBA experience becomes much more important in the interview process, and these roles are not always promoted at your business school as part of the banks’ on-campus activity. That being said, students looking at other roles in banks should keep an eye on their school’s jobs portal – some employers use these job boards as a free and easy way to search for well-qualified talent.
Derek Walker is an independent careers consultant, a former director of careers at Saïd Business School, University of Oxford, a former director of campus recruitment at Barclays, and a former of director of staffing for the investment bank at Merrill Lynch.
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