How Facebook lost its hiring edge and banks could benefit
Tech behemoths like Google and Apple have overtaken investment banks as the destination of choice for many blue-chip recruits. While this narrative has been slowly building for several years, highly recruited students first began passing on careers in banking in large numbers following the financial crisis. Pre-2008, the likes of Goldman Sachs and J.P. Morgan stood atop the rankings of ideal employers. Now, many top tech companies rank ahead of banks when it comes to prestige. While investment banks have been fighting the PR war to win back top junior talent, there may be nothing they can do. Somewhat ironically, banks may simply need tech companies to do what they did in 2008: fall flat on their face and lose the faith of the general public.
Taking a quick glance at the latest employer branding study from Universum, there were few surprises. In the business category, Google finished as the most attractive employer, Goldman Sachs was second, while the Big Four accounting firms filled out the top half of the first dozen companies in the rankings.
The top of the engineering and IT category was even more predictable: Google, Microsoft and then Apple. But where was Facebook? The social networking giant fell precipitously over the past year – all the way down to 23rd – behind the likes of Goldman Sachs and consulting firms McKinsey & Co. and Boston Consulting Group. J.P. Morgan found itself just a dozen spots behind Facebook. No matter the bean bag chairs and casual dress code, Facebook’s scandal-plagued year has significantly affected its brand in the minds of future recruits.
“Over the last 12 months the social giant has faced a bevy of crises—from the privacy scandal of data partner, Cambridge Analytica, to claims of Russian-funded operatives using Facebook to interfere with elections across the world,” the study authors wrote. “Mark Zuckerberg, once the epitome of digital innovation, now often appears tone deaf to public concerns about Facebook’s power.”
A current Facebook employee who formerly worked in the tech department of a large bank said he hasn’t yet seen the company lose its recruiting edge but wouldn’t be surprised if the incoming generation of talent starts looking elsewhere and if there is more employee churn than in years past. He spoke of a sense of acrimony at the office caused by politically-based divisiveness. “The perception that Facebook has been used as a medium for right-wing influence is very much part of the discussion,” he said.
Late last month, Business Insider reported on an employee divide at Facebook where roughly 160 workers joined together on an internal message board to protest the company’s “intolerant” liberal culture that is “dripping of hate” for conservatives. And just yesterday, news broke that Facebook gifted $15,000 to the National Republican Campaign Committee in mid-August with no offsetting donation to the Democratic side. “That won’t help,” the employee said.
No longer a young and nimble company, Facebook is beginning to face pressures that accompany great influence. Its response to those pressures has apparently caused some potential recruits to move the company down their list. “Facebook has been unable to restore trust among Generation Z, particularly among those seeking careers in engineering and IT,” according to the study authors.
But before banks celebrate a potential recruiting edge, it’s worth noting that tech companies like Google and Apple have faced their fair share of criticism and remain atop the rankings. Google has been fined over privacy breaches while Apple has taken heat over the working conditions of some of its suppliers, yet neither has taken a fall like Facebook, at least with this study. The Facebook employee believes the difference lies in the fact that the social network’s scandals are intertwined with politics at such a polarizing time.
The other issue facing banks is that a full decade may not be enough time to clear the memory of the financial crisis and who the public blames for it. "I was surprised at how much vitriol there is about the financial crisis 10 years later,” New York Times' columnist Andrew Ross Sorkin said this week in response to J.P. Morgan CEO Jamie Dimon’s comments on being able to beat President Trump in an election. "The amount of anger was so palpable, and I think that to this very day it pervades the entire conversation.”
The only silver lining is that the next batch of top university recruits were eight years old at the time. So there’s that.
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